If you want to invest in real estate, you need to know what kind of property you want to spend money on! If you invest carelessly, you could be far into the red before you know it. Keep reading for tips to help you make informed decisions in your commercial investments.
Regardless of whether you are buying or selling the property, it is in your best interest to negotiate. Protect your interests by standing up for yourself regardless of who is on the other side of the table. Negotiate a fair price rather than accepting one that is too high or too low.
Take some digital photos of your property. Make certain that the pictures show irregularities, such as holes or bad paint on walls, carpet stains, and bathtub or sink discoloration.
Whenever you are considering a commercial lease, you need to think about pest control. If you are renting in an area that is known to have a lot of rodents, pests, or bugs, then ask your agent what the policies on pest control are.
When you have to decide between two commercial properties, think on a bigger scale. It’s just as difficult to obtain adequate financing for a 10 unit apartment complex as it is for a 20 unit building. Generally, this is much like the principle of buying in bulk; the more units you buy, the lower the price per unit.
Before buying a commercial property, research its net operating income to make sure you don’t lose money. To maximize your success, keep your numbers in the positive values.
If you plan on renting out your commercial properties, find simply and solidly constructed buildings. Because it is apparent that these types of structures have been kept in good condition, it greatly increases the chances that tenants will be quick to rent the space. These buildings also provide much easier maintenance for both the tenants and the owner, as they are less likely to require repairs.
Ensure there is adequate access to utilities on the commercial property. Your business has its own utility needs, but you are most likely going to need water, sewer, electric and possibly even gas.
Consider the surrounding area when you buy a piece of commercial real estate. Expensive, luxury-oriented businesses will thrive in more affluent neighborhoods. If your business services will do better in a poor neighborhood, buy property there!
Before you enter into any negotiations for a lease on commercial real estate, attempt to decrease anything that may be thought of as a default event. This lowers the chance that the person renting will fail to uphold their end of the lease. You want to avoid any circumstances that could lead to this occurrence.
Make sure that you explicitly welcome both local and non-local buyers when you sell a piece of commercial property. Many make a mistake in assuming that the only people who want to buy their commercial real estate property are those who are local buyers. There are many private investors who prefer to purchase reasonably-priced real estate that is not local to where they reside.
Keep your focus on the largest issues when writing your letters of intent. Keep it simple and save the smaller issues for later in the negations. The initial negotiations will be less tense and the smaller issues will seem less important later.
You might need to reconfigure the interior of your property before you can use it properly. In some cases, these may be minor changes, such as a new coat of paint for the walls or a new arrangement of furniture. However, many people find they need to take out or add walls to make modifications to the basic floor plan. Negotiate these changes ahead of time with the landlord. He may be willing to share these costs needed in order for you to move in.
As you’ve seen from these tips, it is very possible to achieve success in real estate investing. The formula for success includes skill, research and some luck. Remember that real estate is a risky activity and you will have to apply everything you learned to increase your chances of being successful.