Investing in real estate has long been a proven way to grow wealth. Many people start out by investing in residential real estate, and the next step after that is investing in commercial real estate. Owning commercial real estate can come with huge payoffs over time, but since commercial real estate typically costs more than residential real estate, it is important to know what you're doing and buy the right property if you want the transaction to be successful. If you're interested in purchasing commercial real estate as an investment, use the following tips:

Understand Terms Related to Commercial Real Estate 

Before you begin to look for commercial real estate to invest in, it is in your best interest to do a little bit of research and learn as much as you can about the different terms that are often used when talking about commercial real estate. Some common terms that you may hear when dealing with commercial real estate include usable vs.rentable square feet, capitalization rate, debt service coverage ratio, and cash on cash. Having an understanding of terms like these will make the process of purchasing commercial real estate much easier for you.

Work with an Experienced Real Estate Agent

When it comes to investing in commercial real estate, an experienced commercial real estate agent is one of your greatest resources. Since buying commercial property is such a big investment, it is essential to work with the right agent. Take your time when selecting a real estate agent to work with and interview several agents before you make a decision about who to work with. Your best bet is to find an agent who has many years of experience as well as a deep understanding of the commercial real estate market in the area where you want to make your purchase.

Get Financing in Order

Before you begin looking at commercial property for sale, you need to take the proper steps to secure financing. While some investors may have enough liquid funds to pay in cash, most end up financing the purchase of a commercial property with a loan. Carefully review your finances, determine how much you want to spend on your commercial real estate purchase, and then contact lenders. Make sure that you have all necessary documentation on hand in order to speed up the pre-approval process. After you are pre-approved for a loan, you will be in a good position to make an offer on a property.