So What Can I Do With This Property, Anyway?

I am NOT going into this place!

Okay, there's this restaurant around the corner from where I live.  It used to be a pizza hangout.  Then, it was a steakhouse.  Then, it was a Greek place.  Then it was a laundromat.  Then it was a burger joint.  Then it was a tattoo parlor.  Now, it's a frozen yogurt cafe, but the rumor is that it's being sold to a guy who wants to open a transmission shop.  Locals say the place is under a curse, and I agree...  The curse of clueless owners!

So let's say you've just inherited a piece of real estate from your great-aunt Wilma Wigglesworth, and you're looking to turn it into an investment property.  What can you do with it?  What SHOULD you do with it? First, keep this in mind.  It's an investment property, which means it's supposed to make money for you.  (What a concept, I know.  Go figure.)  This is not the time to open that tofu-and-bacon ice cream stand that your college buddies dreamed up after too many kegs of beer one night.  So if that "next big thing" isn't the answer, what do you do?

You can put it here, here...  but not here.
Not ever!

First of all, hire a professional to do the research for you.  Have someone determine what the zoning is for your property.  Is it residential, multi-family, or some degree of commercial?  Just because some properties are developed in a certain way doesn't mean that things haven't changed for new developments.  Zoning can change drastically over time, so always check.

Next, have a professional (such as a commercial real estate broker) do a neighborhood evaluation.  There are actually brokers who specialize in this!  They can determine what sort of business best meets the needs of the neighborhood demographic, whether it be an ethnic restaurant, laundromat, or professional offices.  Building the right kind of business for the area can go a long way toward breaking those "curses" we hear about.

I was only going to build a daycare...

Once you've decided on a project type, have your design professional further check the zoning.  Find out things like setbacks, parking requirements, building heights, number of units allowed, etc.  Every zoning area is different.  You might think you can only build 4 condos on a piece of property, but with creative design and working with the Building Department, you might be able to build 10!  I recently had a client who was told he could build 3 condos on his property.  Turns out, if he bought the identical size adjacent property and combined them, he could build not just 6 (3 doubled,) but 11 units!  Again, it pays to do your homework.

So don't be afraid to use that property, but put your personal desires aside and focus on what is going to be the best investment.  Great-aunt Wilma would be proud...