Expanding Your Commercial Real Estate Portfolio

What to Expect and How To Do Decide if it’s Right for Your Business

In the world of commercial real estate (CRE), expansion is an attractive and seemingly easy investment to grow your business. However, the once consistent growth potential that the industry offered has hit a few snags over the last year. If you’re already a thriving CRE operator, the idea of expanding might be the right move, but it’s important to consider the potential risks involved to ensure your business stays lucrative.

Knowing when to invest in the right property in any real estate realm is vital to its success, but especially so in the commercial real estate world right now. With demographics and much more changing in the market, it’s important to keep up with what’s happening before making any moves to expand.

So what should you consider before making a move to expand your commercial real estate business? Let’s dive in and break it down.

What are the Logistics?

When it comes to expanding your commercial real estate business, dealing with the logistics of managing a new property is one of the most overlooked components. A few questions you should ask yourself:

• How is your current CRE business modeled? Will it support this new property the way it needs?
• Does this property need to be managed in person? Or can it be done remotely? Will that require another person on your payroll?
• Who will oversee your people on the ground? Or help your tenants with their needs for the property?

These questions will lend themselves to help you distinguish if the property you’re interested in is a good fit for your current business model. And if it’s not, help guide you as you try to figure out if you have to pivot to make it work for you.

Adding properties to your commercial real estate business should add value to your portfolio, not headaches. If the specific property you want isn’t the best fit, that doesn’t completely rule out your opportunity for expansion. If the logistics are there, we say it’s probably a good opportunity for you!

Are the Financials There?

Many commercial real estate business owners found themselves struggling after the COVID-19 outbreak sent many of their tenants to work remotely, both temporarily and on a more permanent basis. While many property owners used this as an opportunity for innovation, others took a hit. As a result, the number one item you need to consider before expanding your business is the financials.

Before taking a gamble on a new property, it’s important to ensure that your financial structure won’t be in jeopardy if this new property doesn’t bring in the income it projects. If you aren’t sure if your business is stable enough to handle the risk, it could be wise to spend more time streamlining your business. This can look like renovating your current properties to be more appealing to higher ticket clients or a new industry. Or it could be simplifying the backend of your business with a tool like RealDash. Using a tool like RealDash can give your business the leverage it needs by freeing up your time and resources into a straightforward software that’s here to make you successful.

What Do Your Investors Think?

Your investors are smart; they invested in you, didn’t they? Before taking any major steps towards expanding your business, talk to them and see their perspective on the investment. Do some market research and present your findings to get a holistic view on whether this may or may not be the best move for both of you. They may be able to help you see some potential risks or opportunities that may not be apparent on the surface.

Taking on a new property can be a lot of work and risk. Small issues are manageable when you only have one or two properties, but the more minor issues compound and become large hurdles once you add properties. The RealDash technology helps you scale and take the stress out of dealing with the mishaps with managing properties. This commercial real estate software makes it easy to do all the asset management in-house and stay organized, so you don’t miss anything. To learn more about how RealDash can change your business, schedule a demo today!