If you’re buying a commercial building so you can lease it out, here’s what you need to know first.
Mixed Use Commercial Spaces
If you’re looking to increase your financial or investment portfolio by adding some real property, there are many options to consider. You could try to flip some houses in a low cost area slated to grow. Or, you could get into the commercial real estate market. This may include any different number of options for commercial spaces. Mixed use properties have much to offer, both for tenants and investors.
- Office space
- Residential space
- Public space
Each of these categories provides a strong potential for long term and reliable income opportunities. You can be a commercial landlord, or property manager, or you can become a silent investor and hire a property management company to handle the details. Although there is much money to be made by purchasing and leasing commercial real estate, there are also some pitfalls you want to keep an eye out for along the way.
Insurance Liability and Costs
As one of the biggest expenses in commercial real estate, insurance premiums seem to be constantly on the rise. Depending on type of space you have, you will will need to purchase specific policies. In the case of mixed use buildings, you may need additional fire coverage for one area and internal flood insurance for a separate business. Leasing to office building tenants or residential customers is a little easier in terms of insurance policies, because these groups are not considered high risk in most cases. Individual residents can even purchase their own renter’s insurance since you won’t be required to cover their personal property.
Zoning Laws and Parking Permit Changes
Many things are subject to change for any property owner. So, you want to ensure that you are up to date with all zoning meetings. Attend them. It’s your responsibility to know what’s going on in the community and give your input when it could potentially impact your own business. Parking changes, such as adding metered parking, closing off street parking, or proposing to close or change fee structures for nearby parking garages all have a potential impact on your bottom line. Don’t risk losing your profits by not being aware of upcoming community changes. Perform your due diligence regularly and enjoy the rewards of commercial real estate.
Hot Key West Business Opportunities
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