Commercial real estate is an entirely different ball game than residential property. This article provides valuable advice and tips that can help you make the best and most profitable decisions.
Location is a very important part of commercial real estate. Take into consideration the class level of the neighborhood, other commercial properties surrounding it, and accessibility. Also look into growth of similar areas. You need to be sure that in five to ten years later, the area will still be growing.
If you are planning to rent your commercial properties once you purchase them, opt for solidly constructed buildings that are simple in their design. A well-built building will attract tenants quickly because tenants want a property that is solid. This type of property will also make maintenance much easier on both you and your tenant.
If you plan to rent out a commercial property, you should do all you can to make sure they stay occupied. Vacancies cost you money, because you have to pay for maintenance and upkeep without drawing income from them. 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.
When you are shopping for a commercial property, be sure to confirm that you will have access to utilities. Every business’ needs are different, but at a minimum, most businesses will need power, sewer and water services.
Advertise your property for sale locally and outside your region. Many sellers mistakenly presume that their property will appeal only to local buyers. Many private investors are willing and able to purchase properties outside their immediate community if the price is right.
Start drafting letters of intent by focusing on the more central issues. Once you have agreement on those, broaden the negotiations to include any smaller issues that remain. This will make the negotiations faster and less tense, and it will also cause the lesser issues to be completed easier.
When searching for a real estate agent, keep their disclosures in mind so you know who they are working for. Look for any disclosures regarding dual agency. With a dual agency, you have the real estate broker working on each side of the transaction. This means the broker represents you and the landlord during the transaction. If there is a dual agency, everyone should be honest about it and find an agreement.
The borrower of a commercial loan is the one that orders the appraisal. Your bank will refuse the appraisal if you try to submit it. Spare yourself further hassle by initiating the request yourself.
Real Estate Broker
If you want to make sure that your real estate broker is right for you, inquire as to what they think is a success or failure. Ask them to define their results measurements and how they determine it. Be sure that you understand his techniques and approach. Make sure you agree with the values, principles, and strategies of the real estate broker you choose.
An honest broker should be willing to answer questions about how they earn their money. They should be up front about what their business model is and any interests that differ from yours. You should know exactly how they will benefit from any transaction they take care of on your behalf.
Make sure you consider any possible environmental problems. One big concern is hazardous waste on your property. The fact that you are responsible for causing these issues is irrelevant; a property owner is required to fix them, regardless.
There are a lot of ways you can spend less when repairing cleaning efforts. If you owned part of a property, that is when you are responsible for cleanup costs. Any needed environmental cleanup can significantly cost a lot of money. To avoid this nightmare, have an environmental inspection done on the property prior to buying it. They tend to be bit pricey, but they will be worth it in the end.
There are many things to learn about the commercial real estate market. Keep the strategies in this guide in mind to help you get a good deal that will fit your needs in selecting the building you need for your business.