Commonly Believed False Ideas About Commercial Real Estate

Commonly Believed False Ideas About Commercial Real Estate -


Investing in real estate can be the best investment but there are few unknown fears start taking place in the investor’s mind when they think of investing as there are many misconceptions in the market about it. This article is an overview of all the misconceptions and myths about the commercial property investment so that it does not de-motivate you when you plan to invest and you have a better picture in your minds about this kind of investment.

Huge Amount Of Funds Is A Must

There is a prevalent thought that the people having huge funds only invest in this section. It’s obvious also, as the properties are costly and to buy them huge money is required. It’s all about your belief in the potential of the property and your risk taking ability. Bank will agree to sanction a loan if you can make them believe in your plan and show them that how you will be able to pay the installments. Hence you don’t have to have money in bulk if you want to get into it. By chance If you are not able to pull funds from bank, there are many private lenders who If know you, may lend money looking at your confidence. The interest will be higher in the private lender’s case but you can get money from various lenders if you have confidence upon your plan. So, opposite to the myth, investment in commercial real estate not only the rich people’s business but one can start it with taking money and then can go to bigger buildings.


Fear of long numbers is another fear. People do not want to get into something which they don’t understand and also which they cannot handle it themselves, specially the new comers. It is true that there will many calculations to make the predictions and understanding and also for many processes required, but gone are the days when these things were done manually. These days there is reliable database available even on web. Then there are tools and software which will calculate anything you want in seconds and also give the required suggestions.

The new investors don’t need to be afraid much of just because of the numbers as these things can be also get done by someone and ones you get in to it, slowly the understanding will increase. Many less qualifies people are making big money in commercial properties. It’s more about the courage more than the ability to calculate.

All Commercial Properties Are In Advertisements

As per the common belief the commercial properties are listed in newspapers but the reality is different. If you are planning to invest in commercial real estate property, don’t just look into the advertisements as many of those required properties will not be even listed anywhere. This myth is a hurdle for the new investors in reaching to the right property as they try searching it in advertisements. In order to get the right property one has to contact an expert broker who has contacts with the owners and investors. Their data base and inputs will help you to reach the right property but before reaching a broker it’s advised to be sure of the type of the property you want to buy, so that it does not get confusing when you approach them.

Commercial Property Is More Difficult To Manage

In comparison the residential properties, management of these properties is considered to be a hurdle to the people wanting to invest in it without being much involved. They just want to invest the money and do not want to do it like a job but these are so many processes involved that one has to too give considerable amount of time in it. Investor can always hire someone or an agency to take care of all the necessary processes and also the vendors related to the property users. This is how the big investors work to save their time and put that into next investment.

Anyone Can’t Find A Good Property

The prevalent thought is that everyone cannot crack a good deal. There are few people who are lucky or smart enough to find appropriate properties in appropriate price but this is not true. If you plan well, strategize well and then contact to the right person it is not much difficult. If enough efforts are made, even if the market condition seems difficult, the good deals can be made by anyone who really wants to do it. There are always people who want to sell properties or rent as the businesses are moving out or they just in need of money. Hence one must believe that a good deal is always there for him and they try with whole heart.

Hiring A Personal Agent Is A Waste Of Money

People just go with the agent who works for the owner. In this case it is very much possible that the agent keeps the owners interest on priority than yours. Hiring an agent is considered to be an extra expense and many people just go with the owner’s agent which is not a good idea. It’s always better to hire your own agent to get deal inclined towards your interest. People in the business from a long time always keep their own agents, which ensures the agent’s loyalty and at the same time agents are very good advisors and if you hire them personally, they can save you from any wrong deal as they know in and out of this business and market condition more than you.

As we see, how there are many negative thoughts spread about this type of investment. In today’s scenario, due to technical options, agencies active to help the investors in managing the properties, role of brokers which makes the search easy and bank’s contribution to the industry which motivate the new investors come forward and make their first commercial property deal and increasing numbers of the private lenders also is playing an important part to make it easy and the problems which were real in the past have now become just the myths.