When you are investing in commercial real estate, you are most likely to be faced by four types of risks and these risks are market risks, performance/financial risks, physical risks and tenant risks. When you are faced with the market risks, you have to ask yourself whether the fundamental conditions of the market can allow you to meet the return on investment (ROI) goals. In addition, ask yourself whether the projected financial performance will allow you to meet your return on interest goals.

One of the risks that require special attention when you are buying commercial real estate is the tenant risk. This is because your tenants are not just living in your building but they are conducting their businesses as well. Their willingness and ability to pay you rent will largely depend on the health of their businesses and not just on their ability to draw a paycheck.

Leave a Reply

Name (required)

Mail (will not be published) (required)

Website