By Adelmar Adelmar

Purchasing an office building is a great investment. You can rent office space and collect a sizable income for the rest of your life (assuming you continue to own the property). If you make the right investment choices, you can continue to charge higher and higher rents over the years, growing your income significantly and securing your financial freedom. Have enough properties and you’ll retire early and create the life you’ve always wanted.

Yet just like with any real estate purchase, you have to carefully research your options for office space to ensure you are making the right choice. The wrong purchase can cause you to lose everything.

Here are a few things to keep in mind when looking for office space investments:

Location

The first rule of any real estate is location, location, location. Yet finding a good location isn’t always simple. You might think a location is great because development is booming and rents are rising. Yet in a year or two, a major project could stall and take all the local property values with it.

You need to look beyond what is hot now and do your research to know what the long-term trends for the area are. Look for areas that have a consistent history of growth, such as downtown Chicago office space rentals.

Tenants

When you check out a property, you need to consider what type of tenants the building is likely to attract, as well as what types of tenants are in the surrounding area. For example, if the building only attracts small mom-and-pop type establishments that can’t afford large rents, it won’t be a good investment if the property itself is at the higher end of the market. You need to make sure the tenants who would want to move into your property can afford the rents that will make the property profitable.

You also need to look at whether there are any tenants currently in the building. If there are, determine whether they are likely to stay and what their long-term business viability is. Properties that have established and successful tenants can offer long-term profitability.

Size and Condition

What is the size of the building? This points to the types of tenants it is likely to attract. Large, warehouse type spaces will attract big retail businesses or manufacturing firms. Is the space attractive for those kinds of businesses? Smaller buildings will attract retail shops and businesses. Does the building have what they need? You always have to think with your end user in mind.

Also consider the condition of the building. Some minor repairs or renovations shouldn’t be deal breakers, but you don’t want to get tied up with a property that will require extensive, ongoing repair or maintenance. As the landlord, you will be responsible for upkeep. Make sure it won’t cut into your time or profit.

Do your research and you can find an office space that will grow your portfolio and give you the means to invest in new opportunities.

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