Getting involved in commercial real estate means going through a door that swings both ways. It can bring you huge profits, but it can also take away that profit away from you. You should be wise about the particular properties you invest in, as well as how exactly you go about securing the resources to buy them. Read on to find some ideas to help you make sound decisions when it comes to property purchases.
When you are buying or selling commercial real estate, always negotiate. It is important that your concerns and opinions are heard and recognized by the other parties; you must always put forth the effort to ensure fair pricing for the commercial property.
When dealing in commercial real estate, it is important to stay patient and calm. Don’t make any hasty investment decisions. The property you buy in a hurry might not deliver what you need to reach your goals, leaving you to regret the purchase afterward. Realistically, it can take upwards of a year to find the right investment in your local market.
Pest Control
Pest control is something you should look into when renting or leasing a property. This is especially true when renting in an area that has a lot of bugs or rodents, so be sure to talk to the rental agent about some pest control policies.
Think larger when you’re thinking about two commercial properties that are viable. Whether it be a twenty or ten unit apartment complex, you want to get adequate financing to back you up. However, buying several units will cause the price of an individual unit to decrease.
Do not hire a broker without finding out more about their past experience within commercial property. Don’t use a broker who doesn’t specialize in the type of real estate investment you’re interested in. Make sure your agreement to work with that broker is exclusive.
Research and learn more about the Net Operating Income, a commonly used metric for commercial real estate. As long as you get positive numbers, you will be successful.
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 you discover that you have multiple properties that are unoccupied, you should attempt to ascertain the underlying reason. Further action may be required on your part to avoid scaring off potential tenants.
Make sure that the commercial property has access to all utilities needed. Your business has utility needs of its own, but you will also need water, electric, sewer and maybe even gas.
If you put the commercial property up for sale, have it inspected. Any problems or necessary repair identified by a professional inspector should be addressed and fixed as soon as possible.
Do a walk-through of each property on your short list. It may be a good idea to take a professional contractor with you when you check out properties you are interested in purchasing. Set the stage for future negotiations by putting forth the preliminary proposals. Closely review any counteroffers you receive prior to making a final decision. Remember the decision is an important one, so take your time.
If there is more then one property you are considering, acquire the house survey checklist for each one during your site tour. Make sure to advise the property owners when you want to take the next step past the first proposal responses. You may want to offhandedly let the owners know that theirs is only one of a few properties in which you are currently interested. Telling the property owner that he has competition for your money might inspire him to offer a better price to encourage you to buy from him.
Have a list of goals on hand before you start searching for commercial real estate properties. Identify which features in a commercial property are high value to you, and make a list. This can include the number of floors, units, square feet, the building layout, and anything else that is important to you.
Clearly, investing in commercial real estate will not bring you money for nothing. You will need to play a very active role, devote time and make a sizable investment, at the beginning, to bring about the results you’re seeking. That, though, is still not a guarantee that you will make money, and you could possibly still lose money.