Research carried by the World Economic Forum shows “50% of all direct commercial real estate investment is being made in 30 cities worldwide”. And New York City holds the second place. As a first city in the United States, it’s investment volumes has increased 66% year on year. However, significant investment market does not necessary means profits. Several key factors need to be considered based on the needs of the investor.
Purpose of Investment
As an investor, you need to ask yourself two types questions: (1) What types of property you want to investment? New construction or existing building? Multifamily or commercial property? (2) After buying this property, how you going to use it to create profits? For rental? For sale? Answering those questions are important as they decided how you going to act accordingly.
Preparing for the risk
Unless you just want to investment an excellent established property with a stable financial situation, real estate investing could be high risk. Such as commercial land, development property investments, if something goes wrong, your money will never come back. So the solution is always prepared, doing researches, reviewing reports, communicating with the project director, selling agents, and asking questions.
Location, Location, Location
In real estate industry, the place of a property primarily decides its value. For real estate investment, you need to pay attention to the quality of the neighborhood, schools, crime rate, amenities, building permits and development, job and population growth rate, and so forth.
Property Value Estimation
There are two ways to estimate the value of property. (1) Comparison, comparing the subject property with other on sale properties, which have similar characteristics. (2) Costs and Profits Opportunity Approach, for new construction or commercial land, property valuation can be estimated by using its’ perspective profits minus expected value summation. Especially for a commercial project, asking for project draft if possible.
Therefore, investing real estate requires a lot of time to research, analysis, and test. As expertise in this industry, Lin Pan Realty Group can search and review the best investment property for you with our advanced property database and years practical experiences.