When is the best time to buy commercial real estate?
When purchasing a real estate property, especially for commercial use, you have to think about the timing. Knowing the best time to buy commercial real estate in Virginia will make a difference between a good and a bad investment.
Always stick to what you know
Unless you are a real estate expert that can predict how the market will shift from month to month, it is always best to stick to what you know and go with your gut feeling. Identify the property of interest, consult with industry experts, and evaluate downsides against upsides. Picking a good real estate agent also plays a crucial role because they can give their two cents in property evaluation.
If you have done the research and are satisfied with the results, the best time to buy is now.
If you can afford to make a purchase, do it
Another essential factor that will help you determine when to invest in commercial real estate in Virginia is your financial capability. If you can afford a property, go for it. Waiting for the price to drop is a double-edged sword. It can quickly go up, and you will lose money in the process or pass on a good opportunity.
Is it a good decision to wait for the prices to drop?
As we have mentioned in the previous section, waiting for the prices to drop is a gamble that could cost you a good deal. However, if you are willing to risk it, you can make more money. That is a good approach if you are trying to build equity via appreciation over time. If you buy when the price is low, you can earn more money over time and sell when the price jumps again. Just know that it is a waiting game that could cost you your nerves and money.
If you find a good location for your business, buy immediately
You cannot put a price on a favorable location for your business. Even if you end up paying more, it is worth it if the place helps you to grow your business in the future and return the money spent. There are many business hubs in the US where buying commercial real estate makes sense.
With that in mind, the experts behind Best Long Distance Movers suggest that if you stumble upon a fantastic location with many business opportunities, the best time to buy is now!
Pick the best time to buy commercial real estate by analyzing demographics and economy
If you are unsure about whether to buy a commercial property of interest or not, you have to look at the local economy and demographics. The idea is to determine if the market is shrinking or growing. If the situation does not look good, it is best to wait for a better opportunity or consider a different property. However, if the research shows promising results, that means the time is ideal for investing.
Look at the city growth rate
If you plan to open a startup, it is essential to consider the city growth rate compared to the limited build space. When cities expand too much too fast, there is an increase in the population that causes a home shortage. Knowing this, it is a good deal if you find a property more suitable for higher-density uses. You can find them on busy roads or city outskirts. These properties are less desirable due to their location. However, that means you can also get them at a lower price.
Analyze the historical data
Another way to determine the ideal time to purchase commercial real estate is to analyze historical data and compare it with current prices. We do agree that the prices of real estate went up due to the pandemic. However, you can still observe the difference and see for yourself if the current price is something you can pull off or not. If the difference between the realistic price and the current one is just too much, you can always wait for a better deal.
The best time to buy commercial real estate depends on the purpose
Why are you purchasing a commercial property now? Are you starting a business, moving to a different location, expanding to other markets, or something else? The purpose will tell you if it is the right time to invest or not.
For example, there are many benefits of renting shared office space. Purchasing open space and leasing it out can evolve into a lucrative business. You can even help prospective tenants team up with moving experts and reach your Virginia property with ease.
How reusable or flexible is your commercial property of interest?
We need to underline the importance of finding a property that keeps its value over time. For example, during the pandemic, office and retail properties lost some of their value as people started working from home and shopping more online. While things have mostly returned to normal, you never know when something like that can disrupt your investment.
When considering when to buy commercial real estate, it is also crucial to think about its usability over the next ten to fifteen years. You don’t want to focus on short-term investments unless you plan to sell at a higher price as soon as possible. Long-term plans have the highest return of investment.
Patience is a virtue
If you are looking for a simple way to determine the best time to buy commercial real estate, we recommend waiting for something that your business needs. Do not invest in mediocre properties because they are cheap. It is better to find CRE with all of the features you need, even if it costs a bit more. If you focus on quality, you cannot make a mistake. Good luck!