For those who are interested in diversifying their portfolio, investing in commercial real estate can be a great option. The market is hot, and there are plenty of new opportunities to begin building a source of income through commercial markets.
However, one major aspect that often surprises investors is the need for commercial real estate insurance.
With insight from Commercial Risk Advisor Rosy Mounce of CapriCMW, here are two aspects to consider when it comes to your next commercial real estate investment.
Tip 1: Know Thy Neighbor
Considering investing in a piece of commercial real estate? While you may be drawn to a property, make sure you have your eyes peeled for your new next-door neighbors. There are a variety of impacts that properties near your new investment can have on your insurance premiums:
What other businesses exist near your commercial real estate property?
Is it a restaurant that uses deep-fat fryers? Potential fire hazard.
Is the property part of a heavily trafficked business mall? Potential COVID-19 exposure issues.
Knowing your neighbors can help you avoid a variety of problems that will lead to high commercial real estate insurance premiums. Partner with a risk management professional who can help you understand what you might be getting into!
Tip 2: Make Sure You Know Your Insurance Policy
Many business owners and investors find that their commercial insurance policy is outdated or incorrect due to one main reason: owners simply don’t know what their policy is! According to Mounce, a majority of savings come from fixing errors in policies or outdated insurance information.
Know what you have today, and make sure that your commercial insurance policy is paying for what you actually need.
As you would with life insurance, work closely with a professional who knows commercial insurance to make sure that your bases are covered. You may be shocked to find out how much you could save with just a few updates and corrections.
Are you partnering with a professional in the commercial real estate world who has your back? A risk advisory expert can help you understand the potential issues that may arise with a new property - both in and outside your walls.
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