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Buying a shopping center? Here are 3 things to consider

On Behalf of | Jul 12, 2020 | Uncategorized |

When you received an inheritance from your parents, you decided that you wanted to invest. That’s a great option, and it can work well for you in the world of real estate. However, you do need to be cautious about how you invest.

You’re interested in buying a shopping center, because you can collect rent from a number of businesses and potentially make significant money off your investment. Before you invest, though, you do need to make sure you’re buying the right shopping center in the correct location. Here are three things to think about before you invest.

1. If it’s established, it needs to have traffic

If you are thinking of buying an established shopping center, then one thing you’ll want to look into is how much foot traffic there is. Are there competitors nearby that pull away customers? You need to do your research, so you know if businesses can survive on sales to the consumers who will come into the shopping center. Having more traffic will also help you get better businesses in your shopping center, and you’ll be able to charge more for the leases.

2. You need to diversify

Looking at the shopping center, is it diversified? What kinds of businesses are there? You don’t necessarily want to invest in a shopping center that has only children’s clothing stores or only restaurants. Instead, your goal should be to invest in a diversified shopping center, so that you know that multiple industries have businesses there. If one industry suffers, the other businesses may still thrive, which keeps your shopping center up and running.

3. Know its age

Finally, get to know the shopping center’s age. You should have an idea of what kind of maintenance it will need and when the tenants’ leases will expire. You want to make improvements while tenants are still there, in most cases, so they want to stick around. Additionally, you should know the age of the shopping center, so you can set enough money aside to take care of repairs.

These are three things to keep in mind if you plan on investing in a shopping center. There will need to be a strong contract in place between you and your tenants, and you should be prepared to negotiate with the seller to get the center for a fair price. Your attorney will be there to help you as you look into investing.