Investing In Commercial Real Estate
Real estate is often termed as the safest way to invest. In fact, real estate investments done with proper evaluation of the property, can lead to added income for many years. The talks of real estate are generally focused on residential real estate; commercial real estate seems to take a back seat. US Virgin Island Commercial real estate is a good option for investors.
Commercial property helps diversify risk. For example, if you own an apartment building and you lose one of your 10 tenants, you only lose one-tenth of the income for that property, instead of the entire rent as you would if you lost a tenant in a single-family house.
Commercial real estate includes a lot of different kinds of properties. Most people relate commercial real estate with only office complexes or factories/ industrial units. Retail structures, apartments, and restaurants, are also good examples of commercial real estate. In fact, such commercial real estate is in demand on St Thomas.
So, is commercial real estate in the US Virgin Islands really profitable? You will need to research the island you´re considering and speak with your Realtor about potential growth. A fixed business that is ready to sell will have Profit/Loss statement you should go over with a fine tooth comb.
If you are interested in an investment but find the prices a little to steep, you could look at forming a small investor group with your friends and buy it together and split the profits.
Analyzing the demographic trends of population growth, income, and employment for the St Thomas market will tell you where opportunity is. It will also show which property types are in demand, or oversupply. You can also do some local checking. Talk to some local commerce. Are they happy with business? Do they plan on renewing their lease. You will want to ask your Realtor about new residential properties being built in the area and whether there are plans for more commercial development. Be sure to ask for the sellers´ Cash Flow Statements as well.
Be sure to ask your Realtor specific questions about the property you are considering. Are there any zoning regulations? If you are buying an apartment complex, find out about the current tenants and their past history with paying rent. Are there any improvements that need attention now? If yes, then find a reputable company in the US Virgin Island region to acquire an estimate of what the repairs will cost.
Keep in mind the property condition, including physical items such as building systems, environmental matters and structural components. Just as important are the intangible items, such as title, survey, and zoning and land-use regulations.
Be sure you analyze the actual income and expense margins. Know what the property is doing now, not what it would do if you say, raise the rent or cut corners here and there. Because if after your purchase you find you were unable to do these things your investment could be lost.
Talking to a local Real Estate Agent in the US Virgin Islands will help you considerably. Jackie Marin keeps her eyes on the pulse of the local market. Whether it is St Thomas, St. Croix or St. John, Jackie can deliver accurate information. Find out more about what Jackie can do for you and how best to invest in the local community by filling out this easy form today!