How to Make Money From a Commercial Property
The real-estate bubble and other problems with physical properties don't have to keep your commercial property from earning a profit -- the key is to take stock of your entrepreneurial options and stick with the one that is best for you and best for your bottom line. Perhaps a business venture doesn't suit the property, in whence case renting or leasing it to another person is an option. Some say a calculated risk is no risk at all; whether that is true or not, researching the needs and desires of the market your commercial property needs to serve will help you make the best possible fiscal decision.
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Instructions
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From Plans to Actions
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Assess your property's abilities -- as well as your own. A sound plan is the core of a business, but it's nothing if it exceeds your capabilities. Whatever operation you choose, it's important to not over-extend yourself or your property; doing so could diminish the quality of your output. The assessment should culminate in a clearer picture of the property's possibilities.
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Decide whether to start a business or find a tenant. Both of these options will generate a revenue stream from the property; profitability depends upon the debt associated with the property and the ultimate success of whatever option you choose for the property. The decision to find a tenant or start a business ultimately depends on the particulars of your property and the market in which it is located.
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Plan the property's future. A plan based on market data and the property's ability is a must, no matter if you rent, lease or start a business on the property. If you intend to find a tenant, an action plan to identify the most successful enterprise to which to lease the property will help ensure that your property generates consistently generates rent or lease revenue. If starting a business on the property is the most profitable route to take, you'll need a more involved plan. A business plan is the guiding document for a venture of any size; according to Entrepreneur Magazine, it's a good idea to even go so far as to plan your business plan -- that is, know what you want to include in the plan before you even write it. Business plans distill your project's essential information, which will also help you solidify your own vision; not only that, many lenders and potential investors require a business plan to review before any money changes hands.
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Stick to it. As with a golf swing, follow-through is key in business. Your research and planning may strike the ball, but if you let the proverbial club roll over afterward, the ball, your revenue stream, could end up in the rough. Once you've found a tenant or started a business -- even if you don't directly manage it -- staying involved with the day-to-day operations on the property ensures that the venture goes as planned. Staying involved also allows you to make observations and collect empirical data that could inform actuarial data and remedy potential problems before they take root and grow. Entrepreneur Magazine characterizes the relationship between a property owner or manager and a tenant similarly to the relationship between a restaurant owner and a hungry guest. As the owner of the property, it's important that you stay involved with whatever operation it houses.
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Revamp and augment the plan as needed. No one gets it right the first time, and even if you come close, times change and businesses need to stay flexible to stay current, relevant and profitable. Inc. Magazine recommends tracking your enterprise's progress on a monthly or quarterly basis. Regularly reviewing business plans, budgets and other guiding documents will remedy irrelevant rules and policies that could reduce the operation's effectiveness.
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References
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