The first commercial property purchase is always the hardest. Take the time to read this article.
Before you invest heavily in a piece of property, investigate the economics of the neighborhood such as unemployment rates, income levels and local businesses. Properties that are near major employment centers, such as medical centers or universities, often sell more quickly and at a higher price.
When diving into the world of commercial real estate, it is important to stay calm and be patient. Do not rush into making quick real estate decisions. You are at risk of making poor decisions when rushing into things, and if your property investment does not work out, you will regret it. It could take you twelve months or longer to get the deal that fits you perfectly.
Commercial transactions are significantly more time-consuming, complex and involved than the home-buying process. Keep in mind, though, that the complexity is required to ensure that your real estate investment gives you a high return.
Do your best to have your properties occupied at all times. Remember that if you have empty units, you have to take care of them. Maintenance costs on empty units can add up. Figure out why you have spaces that are consistently open. In some cases, you might need to do some problem-solving so that tenants will want to rent these spaces.
The area in which the property is located is important. In general, it’s better to locate a business in a richer area because rich customers obviously have more discretionary income. If the products and services you offer are more middle class or less affluent, then purchase in an area where there are more buyers suited to your business.
Be sure to have a professional building inspector go through your property before you put it up for sale. You can fix any problems right away so you have the best available property.
When advertising your available commercial property, do so locally, but also regionally and even nationally. Too many people assume that only the locals are interested in buying property in the area. There are many private investors who prefer to purchase reasonably-priced real estate that is not local to where they reside.
Do a walk-through and close evaluation of each property you are considering. Consider taking a professional contractor along with you as you look over the properties that you consider buying. Put forth your initial proposals, then open the table for negotiations. Before making any commitment, you should carefully evaluate each offer and counteroffer.
When you’re shopping multiple properties, prepare a checklist to make the task easier. Accept the proposal responses from the first round, but be sure to inform the property owners directly if you decide to go further in your inquiries. Don’t hesitate to let it be known that you are entertaining other options. You may even get a more favorable deal!
Know what your specific needs are prior to starting your commercial real estate hunt. You should write a list of which features are most important to you. For example, do you need a specific number of restrooms, a specific amount of square footage, or a conference room?
Scrutinize any disclosures made by a real estate agent whom you intend to hire. Look for any disclosures regarding dual agency. In this case, the real estate agency represents both sides of the transaction. In other words, the agency represents the landlord and the tenant simultaneously. 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.
This article discussed useful methods that you should keep in mind when you are going to buy or sell commercial property. Check your local newspaper and online sources for up to date information about commercial real estate in your town.