Are you ready to buy your first piece of commercial real estate? You no doubt have many questions about how to start, and this article can definitely help you. The following paragraphs are your springboard to commercial real estate profits.
Whether buying or selling, negotiate. Fight for the best price possible and make sure that all parties involved listen to you.
If you are considering purchasing a piece of property, be sure to investigate what the area’s unemployment rates, income levels and average property values are. Properties near hospitals, universities or other centers of large numbers of employees tend to sell faster and at higher-than-average values.
Make sure that you know and understand what “NOI” (Net Operating Income) is. Success means that your income outweighs your operating costs.
Make sure your asking price is realistic. Many things alter the value of your property./
You deal should naturally include inspections, and you should also evaluate the credentials of the inspectors. This is especially true of people who work with insect or pest removal, as there are many non-accredited people working in these fields. Seeking out professionals with proper accreditation will be worth it in the long run.
If you desire commercial property for rental purposes, locate buildings that are simply yet solidly constructed. These properties are generally top sellers because prospective tenants can see how well-built and maintained they are. These types of buildings are easier to fix for everyone and they might not need as many fixes.
If you rent out your commercial properties, always remember to keep them occupied. Vacancies cost you money, because you have to pay for maintenance and upkeep without drawing income from them. If several of your properties are vacant, reexamine your management style and look for ways to fix issues that are keeping tenants away.
Make sure you have the right access that has utilities on commercial properties. Your business is sure to have unique utility requirements, but services typically required by most include sewage, water, power, telecommunications and maybe even natural gas.
Try to carefully limit the situations that are specified as event of default criteria prior to executing a lease for commercial property. This can decrease the chances of tenants defaulting on that lease. This is something you want to avoid.
When you are selling a commercial property, always make sure to include all buyers; this includes local and non-local buyers. Don’t be mistaken by the thought that locals will be the only people interested in your sale. Many private investors are interested in cheap or affordable properties in other areas of the country or world.
Know how to get emergency maintenance performed on a property at a moment’s notice. Speak with the landlord about handling of emergency repairs just so you know who to call in that situation. Keep the contact numbers handy, and ask them in advance what their response time is. In case a maintenance emergency should happen, you can use the information provided to lay out an emergency business and customer service plan to save your company’s reputation in case your business is interrupted.
It is up to the borrower to arrange the appraisal for a commercial loan. The bank won’t accept it as valid. Make sure you have all your paperwork in order before you even apply for your loan.
Consult your tax adviser before buying your first commercial property. They can let you know the cost of the building and how much income is taxable. By taking your adviser’s advice, you may be able to find a location where the taxes are less.
Commercial Real Estate
Now, that you’ve read this article, you should feel much better equipped to enter the commercial real estate market. If you were previously prepared, you are probably an expert by now. With luck, the advice in this article will point you in some new directions that lead you to commercial real estate success.