Success in commercial real estate depends on several key factors. This article goes over those factors to help you know what to look for when considering whether to invest in a property.

Factor 1: Codes and Zoning

Government codes and zoning laws are not the most exciting of subjects, but they can make or break a commercial real estate investment. That is particularly true if they change after you buy a property, making it less useful and valuable. A helpful strategy is to look to invest in areas with up-to-date and/or recently revised zoning laws and codes. They are less likely to change again in the near term.

Factor 2: Visibility (Or Lack Thereof)

Businesses that want to rent your space will be highly concerned with how visible it is. Look for commercial real estate that is highly visible to foot traffic, has easy access by road, and generally looks inviting.

Factor 3: The Neighborhood

A tightly knit community can be a great boost to businesses. Try to invest in neighborhoods that are thriving, or are at least on their way up. To figure out how healthy a neighborhood is, Investopedia’s Brian O’Connell recommends talking to people who already own property there and going to open houses.

Factor 4: Other Businesses

Another strong strategy is to invest in areas where businesses are already succeeding. That is a sign that the area is a good one for businesses, and therefore potential tenants. 

Factor 5: Modification Potential

Different businesses have different needs, so the flexibility of a space is an important consideration. (This may also be affected by the zoning and codes mentioned earlier.) Spaces that are easy to modify have an inherent advantage over ones that are not. 

For more tips on investments and the business world, take a look at Mossberg Strategic Capital’s other blog posts. They cover a wide array of topics.