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Part 2 of 2 - Advice for Small Investors in Phoenix

Start out small – Investing in real estate may require a great deal more of a time involvement than investing in stocks. That’s why first-time commercial investors are advised to purchase smaller properties, such as duplex, triplex or fourplex apartment buildings or single-tenant retail properties. These properties require less initial capital and generally a reduced time management commitment but still provide the experience of ownership and prospect of financial rewards. Often the lender will require investment real estate experience before financing a larger property.

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Stay close to home – Markets across the nation vary as greatly as the landscape of the country itself. Neophyte property investors are advised to make that initial plunge into familiar waters. An investor certainly will be more familiar with the ups and downs of his or her home market rather than one across a few time zones.  It’s more difficult to find good management for smaller properties so keeping an eye on your assets is very important.

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Get professional advice – Commercial real estate, like any long-term investment, presents great opportunity and inherent risks. A commercial specialist experienced in appraisal, brokerage, management, financing and other related areas can prove invaluable to first-time investors in helping to select an appropriate property, minimize risks and chart a long-term path to success. Select a real estate professional who has been educated in dealing with these and other issues which may surface during the anticipated length of time the property will be held. Also, find an experienced tax advisor who can help explain liabilities and strategies involving the Capital Cost Allowance.