Buying or selling your first commercial property isn’t as tough as it may seem. You should know a few things before you get started. This article contains tips to help you get more from your experience.
Whether you are buying or selling, don’t shy away from negotiation. Ensure that your voice is heard, and that you are offering-or receiving-a price that is fair for both parties.
Initially, your investment will take up a great deal of your time. Not only will you have to search out the right property, you’ll likely have to make repairs or renovations to it after the purchase. Don’t throw in the towel because the process is taking too long to complete. The time you invest now will lead to greater rewards later.
If you are trying to choose between two good commercial properties, think big. Regardless of whether the property you decide on has twenty units or fifty, the process of obtaining financing will be the same, and in both cases will require substantial effort. 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.
When choosing brokers with whom to work, find out the amount of experience they have dealing with commercial properties. Make certain that they have experience and expertise in the community you are dealing in. Entering into an exclusive contract with that particular broker is a good idea.
It is always best to be aware of how your asking price is in relation to the market price. Different variables can have an impact of the value of a lot.
If your real estate deal includes inspections (and it always should), make sure to ask to see the credentials of all of the inspectors. Those who work in pest removal should be inspected closely, as they are often not accredited. A non-accredited inspector could be a source of problems.
If you rent commercial property, do what you can to keep occupancy high. If you have open spaces, then you are the person who will be paying for their upkeep and maintenance. If you have lost several tenants or can’t seem to attract them in the first place, there must be a reason. It is your job to figure out the problem and correct it.
Aim to avoid default before you sign a real estate lease. This will lessen the possibility of a lease default by your tenant. This is something you want to avoid.
Be sure to have a professional building inspector go through your property before you put it up for sale. If they flag issues that need to be fixed, repair them before you list the property for sale.
Consider what youR actual goals are before you begin to invest in commercial real estate. List the qualities that concern you most in a property (e.g. restroom facilities, conference facilities, number of units available, square footage, etc.)
Any new space you acquire might need some improvements prior to you occupying it. It may simply be cosmetic issues that need addressing, such as a fresh coat of paint or some furniture rearrangement. In many cases, it may be necessary to move walls or rearrange a floor plan. Negotiate in advance who pays for these improvements or try to get the landlord to pay for at least a portion of the costs.
One of the most important things you should be aware of is emergency maintenance. You should ask your landlord who is in charge of handling emergency repairs. Learn the phone numbers and response times. Consider how an emergency will affect your business operations, and have an emergency operating plan in place.
Consider all of the tax benefits when planning on commercial property investment. Investors will receive tax breaks for both interest and depreciation of property. However, you also need to be aware of a potential tax problem: income that you have to pay taxes on even though you never actually receive it. You should be mindful of phantom income prior to investing.
Ask your broker to explain the methods he uses to negotiate deals before hiring him. You can ask them how much experience and training they actually have. Look for a broker who cares both about ethics and helping you succeed. Ideally, he or she should be capable of helping you get good deals without resorting to immoral or illegal activity. Request to see examples of previous negotiations, both those that were unsuccessful and those that were successful.
The beginning of the article warned you that commercial real estate is nothing something you should go into without the proper information. The advice you have learned in this article will help you succeed in commercial real estate.