Regardless of whether you are new to commercial real estate or already have a significant level of experience, there are always times when the business becomes stressful and overwhelming. In the article below, many suggestions and advice are outlined in order to help alleviate some of the tension that can build up from your career in commercial real estate.
Purchasing commercial properties is more time-consuming and complex compared to the purchase of a home. Although commercial property purchases take longer you will normally receive a higher return on the investment.
Make sure your asking price is realistic. A variety of different criteria require consideration in order to increase or decrease your property value.
If your plan is to use your commercial properties as rental properties, you should seek buildings of solid and simple construction. These are the most likely to quickly invite tenants into the space, because they know it is well-cared for. Buildings like these are also easier to maintain, for both owners and tenants, since repairs are going to be required less frequently.
You need to think over the community any commercial property is in before you commit to it. Buying property in an affluent neighborhood is likely to mean that any business which opens there will be successful thanks to having a clientele with a large disposable income. If your product or service tends to appeal primarily to lower or middle class consumers, look for commercial property in a more conservative neighborhood.
Take tours of the properties that are potential purchases. Consider taking a professional contractor along with you as you look over the properties that you consider buying. Make the preliminary proposals, and open the negotiating table. Before you decide whether you want to accept an offer or not, be sure to carefully evaluate all counteroffers.
When you are looking at multiple properties, get a tour site checklist. Don’t go any further than 1st round proposal responses, unless you let the owners of the property know. It will likely be to your advantage to informally mention that you are looking at more than one property. 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.
Prior to searching for a real estate property to invest in, figure out exactly what you would want in an ideal commercial property. 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.
Plan on doing some improvements to your new commercial space before you can inhabit it. It could be as simple as a coat of paint or replacing some carpet. Other changes may be more significant, such as moving walls or installing new doors. Before buying the property, see if you can get the former owner to pay for some of these costs. If you’re renting, the landlord might chip in.
You need to know the details of emergency maintenance procedures. One way to develop such a list is to ask current commercial investors who they use in the event of an emergency repair. Know their phone numbers and also what their likely response time is going to be. Work with your landlord to create a contingency plan in the event that an unforeseen disaster occurs; this will allow you to avoid customer service or public relations nightmares.
Read the disclosures when you’re ready to hire a real estate agent. Dual agency is a possibility that you need to be aware of. Dual agency in real estate is when the agency works for both parties. This means the real estate agency will work as the landlord and the tenant. If this is the case, and the agent is a dual agent, this should be known to both parties and agreed to by both parties.
Be aware of the potential tax benefits of investing in commercial property. As an investor, you might receive interest deductions as well as depreciation benefits. “Phantom income” is when an income is taxed but never received as cash, by the investors. Learn about phantom income and taxes on commercial income before you invest in your first property.
The search for commercial real estate can be difficult and frustrating, no matter how experienced you are. The advice in this article should help make the process of buying commercial property proceed more smoothly.