People start investing in commercial properties for a variety of reasons. However, you need to decide whether an investment is right for you. Your level of expertise will have a direct effect on the amount of money you’re able to get as a return on your commercial real estate investment. Below, you’ll find some great tips to help you start your commercial real estate career, or to add to your already wide breadth of knowledge.
It is easy to get emotional when you are venturing into the commercial real estate market, but is is very important to stay patient and remain calm. Don’t jump into any investment without doing your research. You might regret it if that property is not right for you. It could take as long as a year to find the right investment in your market.
One of the most critical considerations for valuing a commercial property is its physical location. When investing in a property, consider what type of neighborhood it is located in. Compare its growth to similar areas. You’re not only thinking about the here and now; you want to look a decade down the line too. Pick an area with the potential for sustainable growth.
When selecting a broker, find out the amount of experience they have with the commercial market. Make sure that the agent has the proper expertise with the type of real estate purchase or sale you are looking for. Make sure your agreement to work with that broker is exclusive.
When renting out your own commercial properties, keep in mind that is always best to have them occupied. If you have any open spaces, then you are losing money. If you have multiple properties available, you need to figure out what the reason is behind this, and address anything that is causing tenants to look elsewhere.
Ensure there is adequate access to utilities on the commercial property. Your particular business might need additional services, such as cable, but at the minimum there should probably be sewer, water, phone, electric and gas.
If you put the commercial property up for sale, have it inspected. If they should discover even a single issue with the property, repair or resolve it immediately.
When writing up a letter of intent, make sure to keep your offer simple and straightforward, focusing on the bigger issues at first and then figuring out those pesky, little details later. By focusing on the big stuff first, you will have more pleasant negotiations, and you will be better able to manage small matters in the end.
Determine your business goals before you start your hunt for commercial property. Write down what features are most important to you when you look a piece of property, like the square footage, the number of offices and conference rooms, and bathrooms.
Before you can start using the property you’ve purchased, you might need to make some improvements. The changes don’t have to be extensive. You may just want to repaint or rearrange furniture. Normally, however, it may be something a little more involved like walls being moved. Plan on negotiations with the owner of the property to see if all, or part, of the costs can be covered by said owner.
There are a variety of types of real estate brokers who deal in commercial properties. A full service broker works with both the tenants and the landlord. Some agents represent only the tenants. You may benefit from using a broker who works exclusively with tenants, due to the singular focus.
Commercial Real Estate
As mentioned earlier in this article, you could have a variety of motivations driving you towards commercial real estate investment, but all motivations require learning more about this field to find success. Apply the tips from the article above to your commercial real estate needs and you are sure to be on your way to maximizing your profits.