Commercial real estate can be hugely profitable and make you wealthy. But, considering the risk involved, it obviously is not suitable for everyone.
You should negotiate if you are the seller or the buyer. Let people know what you want and make sure you are asking for a realistic price.
Pest control is an important issue to look at when you rent or lease. This is important in less desirable locations where rodents and/or bugs are an issue. Have your rental agent inform you of any associated policies for pest control.
Purchasing commercial real estate is a much more lengthy and complicated process than that of buying a home. Know that the duration and intensity is essential to getting a higher return on the investment you made.
When interviewing potential brokers, ask them to tell you about their experience level with the type of commercial investments you are interested in. Choose one that specializes in your area of interest. Allow the broker to acknowledge your wish for an exclusive agreement between the two of you.
If you’d like to rent out the properties you purchase, it’s best to buy a simple building with solid construction. You will be able to attract tenants for these properties more quickly due to the fact that they will know the building is well maintained. This sort of building is virtually maintenance-free, so there will be fewer headaches for owners and tenants.
Do your best to have your properties occupied at all times. If you have open spaces, then you are the person who will be paying for their upkeep and maintenance. If you have many open properties, then you need to reevaluate why that is the case, and try to remedy any outstanding problems which have caused your tenants to leave.
It is important that each property offers unhindered access to utilities. 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.
If you are considering more than one property, be sure to obtain a checklist for the tour site. Do not proceed past initial proposal responses, unless you inform the property owners. Make sure that the owners are aware that you have other options available. You may even get a more favorable deal!
Know what your specific needs are prior to starting your commercial real estate hunt. Think of any property features that are high priorities for you and list them down, like the number of restrooms and office, conference room availability and overall square footage.
You should always know who takes care of emergency repairs. Be sure to find out who takes care of maintenance in the building and also who handles emergency repair situations. You should not only commit emergency numbers to memory and post them in a conspicuous location, but you should also know how long it takes various workers to get to your office in an emergency. 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.
There are different types of commercial real estate brokers. You have a full service broker who works on behalf of both the tenant and landlord, then you have brokers who only work with tenants. If you hire a broker that only deals with tenants you may be better off, they are more experienced.
Be aware of the potential tax benefits of investing in commercial property. You will get good tax breaks for interest and also benefits for depreciation. However, sometimes an investor can receive taxed income that is not taken as cash, otherwise known as “phantom income”. Prior to investing in commercial real estate, you should familiarize yourself with this form of income.
There is a considerable amount of money to be made in commercial real estate. Remember that big down payments are part of your investment, not just your time to make these grand investments. To make this happen, put the advice you just learned in the above article to use.