Deciding to purchase some commercial real estate can be an exciting proposition. If so, you may have many questions about the process of acquiring property. It is filled with hints and tips to help you successfully begin your venture in the commercial real estate market.
Before you buy or sell a commercial property, find out several key economic indicators for the region, including trends in unemployment and income, as well as major employers in the region. If the building is near certain specific buildings, including hospitals, universities, or large companies, you might be able to sell it faster and for more money.
Use a digital camera to take pictures. In the “before” photos, especially, make sure that the pictures clearly show defects such as stains on the carpet, discolorations in the tub and sink, and holes in the walls.
Residential property transactions are much less intricate and protracted than are commercial transactions. The duration and intensity is necessary if your investment is to yield a high return.
If your property deal requires inspections (as it should), look at the inspector’s credentials. There are many non-accredited people who work in such fields as insect removal. By hiring an experienced professional, you’re less likely to run into problems after you buy the property.
If you are planning to rent your commercial properties once you purchase them, opt for solidly constructed buildings that are simple in their design. These types of buildings attract tenants more quickly than other buildings, as prospective tenants know that the building is less likely to have maintenance issues. Buildings like these are also easier to maintain, for both owners and tenants, since repairs are going to be required less frequently.
Check out where the utility hook-ups are on any commercial property. Look for access to water, electricity, gas an a sewer or anything specific to what you intend to use this property for.
Lower the risk of default by eliminating as many things that can be labeled “event of default” as you can prior to negotiating a commercial property lease. This will greatly lessen the likelihood that the tenant might default. Once a default happens, you’ll be in big trouble!
Advertise the commercial property to both locals and non-locals. Most individuals make the error of thinking that only the people in their area are the ones interested in purchasing their property. Many private investors are willing and able to purchase properties outside their immediate community if the price is right.
Check all disclosures of the chosen real estate agent that you wish to work with. Never neglect the fact that you may be dealing with a “dual agency.” What this means is that your chosen agency has an interest in buying and selling the property. In the case of a rental situation, the agency represents the landlord and the tenant. Dual agency must be disclosed by both parties and they need to agree to it.
You should meet with a tax adviser before you buy anything. The tax adviser will explain information about the overall costs of the buildings, and can elaborate more about how taxes will affect your income. Work together with your tax adviser to locate an area that have low taxes.
Before choosing a real estate broker, you need to know how they negotiate. Ask them about their background, such as what training they’ve completed or experience they have. Also be sure to ask about their style of work to ensure that they follow ethical procedures while looking for that optimal deal. Ask to see the broker’s portfolio. He should be able to provide you examples of successful negotiations. Also ask the broker to give you an example of an unsuccessful negotiation and explain what he learned from the experience.
Commercial Real Estate
Now that you have read this article, you should feel more informed about the world of commercial real estate. If you were previously prepared, you are probably an expert by now. These tips will provide you with new ways to get started, and enhance your current commercial real estate system so you can increase your results.