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Important Factors in Success Of Real Estate

One of the most important factors that affect the success rate of commercial real estate investments is the ability of the building to attract tenants. A successful investment will have a high tenant turnover rate, as this is an indicator that the building and its vicinity are suitable for attracting a significant number of potential tenants. The greater the tenant turnover rate, the greater the chance that a profitable investment opportunity exists. In most cases, developments that have a high tenant turnover rate also have a low appeal factor, which can make owning commercial properties a less than lucrative venture.

 

Commercial real estate investors must also be wary of investing in properties that are too small. For a successful commercial real estate investment, an investor needs to purchase a property that will eventually be able to attract a significant number of tenants. For instance, purchasing a grocery store that is only a few hundred feet from a popular grocery store is not a good choice for an investor who intends to sell it for a profit. Developments that are too small also have a lower chance of generating the type of profits that a more mature commercial real estate investment will generate.