If you're a commercial real estate investor, Bend is a great place to start building your portfolio. The region's commercial real estate market has shown more resilience than most.
Still, investors would be wise to make calculated purchasing decisions. Only a thorough commercial property valuation can reveal a property's profitability. Thorough investment property assessments can also improve your leasing strategy for properties you already own.
What are the property valuation methods that can point you in the right direction? Read on to find out.
Location and Comps
Bend's commercial real estate sector may be performing better than other regions, but investors should not skip comps. Comps (short for "comparisons") allow you to take a closer look at how properties like yours are faring. To build your comps, look for properties with similar:
- Square footage
- Usage
- Upgrades and amenities
- Number of units (i.e., multiple offices in one building vs. one open retail space)
Perhaps one of the most important factors is location. Everything from walkability to nearby residential zoning to neighborhood income will impact your property's profitability.
Zoning and Permittable Usage
With the right eye for remodeling and creative marketing strategies, you can transform your commercial building into a high-demand property. For example, we've seen investors across the nation convert high-vacancy office buildings into multi-family residential properties.
Is this always an option? The short answer is no, and that has to do with zoning. Zoning determines the permitted use of a property based on location.
Before you start brainstorming ways to make your property more desirable, assess what zone it's in. You'll have the most flexibility if you're in a mixed-use zone (zones ME, MR, MU, MN, and PO). You'll also have more flexibility if you're looking to rent out an office or retail space, as opposed to high-pollution alternatives like manufacturing plants.
Operating Expenses
Once you've run comps and considered viable uses for your commercial property, it's easy to get excited about your potential gross profits. You may even discover that your commercial real estate value is higher than the value of your residential properties.
Before you set your asking rent prices, you need to consider one more thing: operating expenses. Operating expenses can include:
- The cost of utilities
- The cost of upcoming maintenance projects
- Budgeting for maintenance emergencies
- Property taxes
This is often a sobering moment for commercial property investors. If you're concerned about both the high cost and the time investment of running a commercial property, it's time to consider commercial property management. Expert commercial property managers can produce tight budgets and keep operating costs low.
Call PMI Central Oregon for Commercial Property Valuation
Now is a great time to invest in Bend, Oregon's commercial real estate market. However, you shouldn't start marketing your property until you've completed a commercial property valuation. Without one, you may be missing out on opportunities to grow your profits.
If you're looking for a hands-off investment experience, PMI Central Oregon can help. We combine our parent company's proprietary technology with our local expertise to produce real results. Contact us to learn more.
