Commercial real estate is one of the more intriguing investments you can make. There are different ways to evaluate commercial real estate, causing disparity among investors. As an investor in commercial real estate, you want to choose the right location.
To that end, Brentwood contains prime opportunities for commercial real estate investment. Brentwood is among the best neighborhoods in Los Angeles. It’s home to an affluent community and is an ideal place to own commercial real estate. Read on for insight into the market for commercial real estate in Brentwood, CA.
Invest in properties that generate reliable income
Choosing properties that generate good income may seem like a no-brainer to a seasoned investor. For those who are just getting started, it’s important to emphasize this point. Many people today confuse investing with speculating. The latter is the practice of buying an asset in hopes of realizing capital appreciation down the line. While investing and speculating overlap in some cases, savvy investors weigh the underlying value of an asset and the cash income it generates (not just its potential for price increase).
It’s always exciting when you can increase your wealth through capital appreciation. However, the point of investment is to generate income, not just to own property worth more over time. Capital appreciation over the long-term time horizon is generally expected in real estate, as shown in various data points (like the S&P/Case-Shiller U.S. National Home Price Index). By contrast, the best commercial real estate will accrue income that puts cash in your pocket today.
While your properties will hopefully accumulate value during the period you hold them, you will be more successful as an investor if your properties generate cash regularly. The most common way to generate income from commercial properties is to rent or lease them out to tenants. Commercial real estate includes all kinds of buildings used for various purposes, but rental properties are one of the most common.
Buy occupied properties
Imagine an investment that starts paying you cash as soon as you buy it. You can do just that when you purchase an already occupied rental property. You can easily find multi-family properties in many sizes already filled with tenants. To receive monthly rental income, all you have to do is buy and maintain the property. With some properties, you can secure longer-term leases so that you know the property will be filled for the foreseeable future.
Manage your properties wisely
Managing and maintaining properties is one of the main challenges of ownership, especially from an investment perspective. Many property owners find their time, money, and energy constantly taxed by dealing with maintenance issues and responding to tenant requests. As such, you should plan your property management and maintenance before you purchase commercial real estate in Brentwood. Contracting a property management company can be an economical way to handle this. If you own multifamily properties and don’t want managing them to become your full-time job, a property management company is a must.
Choose a property management company carefully because the company will represent you in your relationship with tenants. Property management companies that are inconsiderate or unresponsive toward tenants leave a negative impression and discourage them from renting. Diligent and helpful property management companies help retain tenants and attract new ones.
Calculate all costs and revenue carefully
There’s much more to commercial real estate than your initial purchase price. In addition to the cost of the property itself, you need to consider other expenses, such as closing costs. Then, you must determine the logistics and finances of using your new property. Does it need to be repaired, renovated, or repurposed in any way, or is it ready to start earning money on day one?
The above considerations explain why many investors prefer to buy properties that tenants already occupy. From there, you’ll need to calculate your expected monthly earnings and expenditures. With your real estate agent, list the costs of owning a commercial property, including taxes, maintenance, and insurance. Expenditures will vary depending on whether you’re renting out a residence or a different kind of property.
Leave room in your budget
When you’re looking at investment properties in Brentwood, there will be many attractive options. It’s essential to leave some room in your budget to handle incidentals. If you want your commercial property to make you money, you must be ready to handle maintenance, repairs, changes in the local building codes, and anything else that might pop up. If you set aside funds for month-to-month operations, you’ll be well-positioned to realize long-term gains in the commercial real estate market.
Stay educated on the market
Staying educated on market dynamics and investment opportunities is vital to your long-term success as an investor. An excellent place to begin is the National Association of Realtors (NAR) commercial real estate page. A knowledgeable real estate agent can recommend additional resources, including the latest market data for commercial real estate in Brentwood.
Your agent can be an excellent source for market information, especially if you are working with a realtor with experience in commercial real estate in Brentwood, CA. They will happily explain the different types of commercial opportunities in Brentwood. In addition to residential rental properties, there are office buildings, industrial properties, storefronts, land plots, and other options.
Ready to maximize your investments in Brentwood?
Buying, selling, and leasing commercial real estate in Brentwood, CA, and other top L.A. neighborhoods, offers significant opportunities and rewards — you just need to know where and how to look. The first step is to find the right representation.
Beachrock Group is a local firm specializing in top-tier commercial and luxury residential real estate. Their portfolio of real property represents some of the best available in the premier neighborhoods of L.A., including Brentwood. Check out Beachrock Group’s commercial listings to find everything from economical duplexes to entire residential buildings at a wide range of prices.
*Header photo courtesy of Beachrock Group
