Commercial real estate investment has grown increasingly in popularity over the years, and for good reason! From great returns to steadier income streams, there is a host of viable benefits associated with the decision to invest. However, part of being a smart investor is knowing when it’s time to walk away (a subject that isn’t often discussed). If the hype of your investment feels like it’s fizzling, don’t sell just yet. First determine whether your reason for selling is logical or not by reading on.
One of the most prominent reasons investors choose to sell their commercial real estate investment property is due to a major life event. Incidents such as new additions to the family, the death of a loved one, an accident requiring medical attention, an illness, a major relocation, or an unexpected layoff can all be great reasons to make this choice. Most of these come with hefty price tags, and the money you accrue from the sale of your property could be just the thing to help you pay for it.
If your commercial real estate investment property is coming due for some serious repairs, it might be time to start thinking about selling. Before you make a rash decision, however, you’ll want to really sit down and crunch some numbers. What are the expected costs for these major repairs? Will they be offset by the amount of money you could potentially make from rent after they are completed? If the answer to the second question is yes, you might want to stay put where you are, however, you still run into the question of whether or not you currently have access to the monies needed to make the repairs in the first place.
A smart investor understands that it’s not that smart to have all of your money tied up in one thing. While a commercial real estate investment can be a great source of passive income, if it’s the only type of investment that you have, all it takes is one heavy hit to the market and you could find yourself broke. If selling your commercial property will afford you the opportunity to diversify your portfolio by investing in other things, such as dividends, bonds, CD’s, P2P’s, REIT’s, or others, it may be the right time to sell!
It may also be time to sell your commercial real estate investment property if you have found yourself face-to-face with a better real estate investment that requires a down payment that you just don’t have. The commercial market is constantly changing, meaning that an investment that once offered a great return may not pack the same punch as it once did. If unloading your property gives you the capital to put down on a more stable investment, it’s definitely worth the consideration.
If you’re finding that your commercial real estate investment property has been vacant more often than it’s been occupied, it could be a good indication that it’s time to get out, particularly if your local market is still going strong. If your space is costing you more than it’s bringing in, it certainly doesn’t make any sense for you to hold onto it. Alternately, you could choose to find out what it is that is deterring tenants and decide whether or not it’s worth the time and effort to make an additional investment in the space, which brings us to our last point.
Investing in commercial real estate can be very fun and exciting, but if it’s lost that appeal for you, it might be time to sell your investment property. Commercial real estate, just like residential, will certainly require a level of upkeep and effort over the years. If your heart isn’t in it or it feels like too much time and effort to do the things that will be necessary to keep your property relevant, you probably won’t have nearly as much luck making money from it. That being said, perhaps it’s time to turn it over to somebody who is looking forward to the undertaking!
No matter what type of commercial property you are interested in buying or selling, you’ll want the team at SVN | Graham, Langlois, & Legendre, LLC by your side. We have a combined century’s worth of experience pairing the right tenants, buyers, and sellers and walking them through the transaction process with ease. Our unmatched service is what’s quickly made us such a prominent part of the local commercial real estate market since 2014. Take a look through our database of properties today and reach out to one of our team members to start touring spaces!