"The only discipline that lasts is self-discipline." -- Bum Phillips
One of the most frequently asked questions I get is, "Where do I start to invest in commercial real estate? What is the best way to invest in apartments and commercial properties?" Or rather, "What do I do first?"
I am going to tell you what you should be asking yourself - and it has nothing to do with money, down payment, rate of return or occupancy.
Here it is...
Realistically, can you take on the management of the property yourself? Do you want to and or can you? Do you have enough time??
OK. That was more than one question.
One of the biggest mistakes I see is that owners that think they have enough time, energy, and resources to manage a property effectively - only to find out they are way over their heads. Usually they find this out when they have a significant problem at the property with turnover, vacancy, or tenant problems.
Then...
They want to sell their property as quickly as possible to get rid of this "headache." Needless to say, this is not exactly the best time to sell your property.
One of the things that I discuss with investors is how to make more money from your apartments or commercial property by NOT managing them. I spend a lot of time on this because it is truly that important. There are two points I would like to make about hiring a professional property manager:
1. Hiring a property manager frees up your time.
Time is the most valuable thing we all have. As you have likely heard - unlike money, we cannot get time back once it is gone.
2. Hiring a property manager allows you to work "on" your investment.
Because someone else is handling the day-to-day operations, you can focus on the most important aspect of investing - being an "Asset Manager."
An "Asset Manager" can clearly focus on how to increase income, reduce expenses, and ultimately increase the property value. THIS is where you should be spending most of your time and effort vs. handling the day-to-day management.
Before you purchase your next property, search yourself for the property management answer. There are very good property managers out there that can do a great job and allow you to work on the property vs. working IN the property. By far, the best money is made when you work "on" the property.
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