Industrial properties are attracting bold investors who wisely hesitate to plow earnings back into a heated stock market. Investors today are well aware of stock market risks. When retail investment markets are frothy, wise investors return to commerce fundamentals. Industrial properties supporting manufacturing, processing, refining, assembly, storage, distribution, and similar production activities represent sound investment fundamentals. Industrial vacancies are low, while retail and residential vacancies remain high. Now is indeed a good time to be looking at New Jersey industrial properties.
No investment, though, is without some degree of risk. Investors can make mistakes buying industrial properties just as they can investing in any other vehicle. What, then, are common mistakes investors make in buying New Jersey industrial properties, and how does one avoid them?
Keep the Bigger Picture in View
A primary mistake when investing in industrial properties involves missing your bigger investment picture. Sure, you may be looking at an attractive industrial property, of which New Jersey has many. Industrial properties can be less expensive than other commercial properties while having fewer tenants, longer-term leases, and more predictable income.
But industrial property doesn't fit every portfolio. The same industrial property at the same good price may make an outstanding investment for one investor but a lousy investment for another. Industrial properties are not particularly liquid. They may also not be particularly diversified or convertible in an industry downturn.
The remedy? Be sure to know your real estate investment goals and the strategies you discern to meet those goals. If you can't see how a New Jersey industrial property fits your big investment picture, then consult a preeminent real estate lawyer at Hartmann Law.
The Devil's in the Details
Another mistake that investors in industrial property can make involves failing to pay attention to the investment's details. Each real property sector has its own peculiar risks and rewards. Purchase contracts, closing documents, inspection results, title commitments, and deeds allocate those risks and rewards.
Too many industrial property investors look past critical documentation details. They think that the investment's value is solely in the price, appraisal, and pro forma. On the contrary, documentation details in any of the following areas may determine the industrial investment's outcome: financing terms, development rights, adjacent uses, construction options, environmental, inspection results, zoning, building codes, taxation, and title.
Contact Hartmann Law LLC
If investing in commercial real property appears to fit your investment strategy, Hartmann Law can help. Hartmann Law educates clients about real property law in terms they understand while helping them see each deal's risks and potential rewards in the documentation details.
Investors make one, two, or maybe half a dozen commercial real estate purchases. An experienced real estate lawyer handles hundreds. Don't proceed naively. Put Hartmann Law's vast experience to your best use. Contact Hartmann law online now for an appointment.