Monday, August 20, 2012


Buying a commercial property is totally different than buying a house, so don't treat them as identical transactions. The following tips will help you make a tidy profit from your commercial real estate endeavors.
Always think ahead when considering a real estate investment. If a property is well past its prime, you could end up putting a fortune into maintenance and renovations. Because of this, it's always important to consider the prime lifetime of any property you are considering and to factor in any additional upkeep costs in determining what you are willing to pay. Updates, such as a new roof or fresh coat of paint, might be necessary. Any building has phases like this, although some do so more frequently than others. Craft a long-term plan for handling repairs and maintenance.
Commercial real estate has many brokers to offer. Some brokers or agents only work with tenants, while others will serve both tenants and landlords. If you're going to be a tenant, working with a tenant-exclusive broker benefits you because of their relevant and deep expertise.
Learn to recognize good deals. Real estate professionals have an easier time finding deals. Their secret is their exit strategy, meaning they know when it is time to walk away. These investors also know when a property is an upkeep trap. They can make complex risk management decisions and can use automated tools to plot these variables against their business goals.
A letter of intent should be kept simple by focusing on larger issues and leaving smaller issues to negotiate later. This approach lowers the overall tension level and actually makes it easier to reach agreement on the details at the end.
Interview your prospective real estate broker to determine what they view as failures and successes, to see if their standards match yours. Learn their methods of measuring their results. Gain a clear understanding of their preferred strategies and methods. Employ a commercial real estate broker only if his philosophies and approach are similar to yours.
Before you jump into a commercial real estate deal, you want to get a lay of the land first. This means considering and examining the general income levels in the area, how high or low unemployment rates are, and looking at the hiring practices of employers within the vicinity of where you intend to invest. Properties located near major employers, like hospitals, schools or distribution centers, are often more in demand at every price range.
Before you consider leasing or renting, look into whether or not pest control is covered in the lease. This is especially important if the region is known for certain types of pest infestations. If this is the case, ask specifically what the landlord will do with regard to pest control.
Borrowers are required to order the appraisal in commercial loans. The bank won't let you use one not ordered by you. Ensure it gets done, and gain peace of mind in the process, by ordering it yourself.
If you have two commercial properties on your short list, you should buy the larger one, if at all possible. Finding adequate financing on a piece of property takes time and patience. Generally, this is similar to the principle of purchasing in bulk; if you purchase more units, you will end up getting a better price per unit.
Interest rates that change constantly can be the single biggest problem facing investors in commercial real estate. Current conditions, with their unpredictable rises and falls, leave investors room to make a great profit or to suffer an incredible loss. Keep this in mind when you begin the process of looking at properties, and match them with your long-term goals.
Develop a clear idea of the amount of available square footage. A commercial property's square footage can be measured two different ways. The first way is usable square footage which is the amount of square footage that can be used for business purposes. The other is total square feet which includes all square footage including square footage that cannot be currently used. It is a good idea to know measurements for each type of square footage. This will allow you to make decisions and speed up the process.
In conclusion, you must consider many different things when you are going to make a commercial real estate purchase. Be certain that you apply the advice from the preceding paragraphs to get fair deals that meet your needs and expectations of the property you deal with.

NOTE: Please visit our commercial real estate secrets website for more tips and information

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