It’s harder to find commercial properties. Although there are plenty of commercial investments in the market, these buildings don’t get preferential listings in classified ads or real estate catalogs as do residential listings. You need to know how to navigate the often complex market. Start by reading this article.
Whether you’re buying or selling commercial real estate, make sure to negotiate. Let people know what you want and make sure you are asking for a realistic price.
When dealing in commercial real estate, it is important to stay patient and calm. Don’t enter into any investment opportunity without doing the proper amount of research. If the property turns out to be wrong for you, you will regret your decision. It could be a year-long process before you begin to see investments in your market pay off.
Pest Control
Before you sign a lease, find out about pest control. Talk to your rental professional regarding pest control policy if you rent in a community known for bug or rodent infestation.
If you are new to investing in real estate, spend some time surfing online resources that house information that seasoned investors use. It is wise to learn all you can, as it is impossible to know too much.
When you are choosing real estate brokers, you should find out the brokers’ experience level in commercial real estate. Look for someone who knows the area you are interested in. You need to get into a type of exclusive agreement with your broker.
Educate yourself about the measurements of NOI: Net Operating Income. In order to be successful, the resulting number must be positive.
If you are renting out your property, be sure that they are always occupied. You are responsible for the expenses associated with keeping your unoccupied spaces updated and maintained. If you have more than one property without someone in it, think about why that is, and fix any problems that might be occurring.
You may need to make some changes to the commercial space you just rented before moving in. The space may be due for some regular maintenance, or it may need something as simple as a new coat of paint. In many cases, it may be necessary to move walls or rearrange a floor plan. The contract you negotiate should clearly spell out whether you or your landlord will pay for these changes, or whether the cost will be shared and in what proportions.
Always include emergency maintenance on your list of need to know things. Find out from your landlord who to contact for emergency repairs, such as plumbing accidents. Be aware of the response time of emergency personnel, and be sure to have their contact information handy. Make an emergency plan once you have this information. If a flood, fire or break-in interrupts your normal business day, you need to have a plan in place so that you can re-open as soon as possible.
Dual Agency
When searching for a real estate agent, keep their disclosures in mind so you know who they are working for. There is a possibility of a condition called dual agency. In this situation, the agent will represent the buyer and seller. In effect, while you are paying the agency, they also work for the opposite side; if you are a prospective tenant, for example, the dual agency represents the landlord, as well. Real estate agents must disclose any dual agency. Both the tenant and the landlord must agree to accept dual agency.
In a commercial loan, the borrower must order the appraisal. You’re not going to be allowed to use this later by the bank. Be properly prepared by ordering the appraisal directly.
When you are pursuing an investment in commercial real estate, finding the right type is only the start of the process. A little knowledge can go a long way.