A lot of people have found success and profit by being involved with commercial real estate. However, success does not come with a magic pill. You need knowledge, hard work, and experience in the industry. This article offers a handful of useful guidelines for a number of topics related to commercial real estate. Read on!
Before you make a large investment in real estate, take a look at local income levels, unemployment rates and the expansion or contraction of local employers. Commercial property near hospitals or schools have higher property values; these properties are also easier to sell.
Use your digital camera to take pictures of the property. Make sure your pictures clearly show any damage or defects, including carpet stains, holes in the walls or discoloration of plumbing and counter tops.
Location is essential to the commercial real estate. What type of neighborhood is the property in? You also want to look for a neighborhood that is solid and growing. This is important, as you don’t want to be in a current growth area only to have the neighborhood stagnate in a few years.
Research your prospective brokers to see how experienced they are with the commercial market. Make sure that they are experts in the area in which you are selling or buying. Once you’ve determined the broker is right for your needs, make sure any agreement into which you enter is an exclusive one.
You must absolutely confirm that your real estate’s asking price is realistic. There are many things that can impact your value greatly.
Make sure that the commercial property has access to all utilities needed. Your business has its own utility needs, but you are most likely going to need water, sewer, electric and possibly even gas.
Be sure you position yourself well when it comes to negotiating any lease for commercial real estate, you want to do things like decrease what could be considered as a default event. This will lessen the possibility of a lease default by your tenant. A default is frustrating and costly.
You need to advertise that your commercial property is for sale to both locally and non-local people. Many people think that investors who don’t live in their city will have no interest in their property, but this is untrue. Many investors will consider purchasing a property outside their own region if the price is right.
If you are writing a letter of intent, take it easy. Go for agreements on the bigger problems at first, then get to the smaller issues later in the negotiations. This way, negotiations will be smoother, and agreements on the small issues are more likely to be reached.
You need to know the details of emergency maintenance procedures. You should ask your landlord who is in charge of handling emergency repairs. Keep the contact numbers handy, and ask them in advance what their response time is. Your landlord should be able to provide you a list of emergency contacts so that you can map out a safe and well organized emergency plan, in case an emergency happens during normal business hours.
Before paying any agent, check his or her disclosures; these can tell you a great deal about the agent’s character and ability. Make sure you understand the potential for the existence of dual agency. Dual agency in real estate is when the agency works for both parties. When dual agency happens the Realtor on behalf of both parties. Real estate agents must disclose any dual agency. Both the tenant and the landlord must agree to accept dual agency.
If you are new to commercial real estate investing, you should learn how to manage one investment type at a time. Pick out just one type of property to begin with and then give it all you’ve got. You will be more successful if you can give one thing your all, rather than trying to split your attention between multiple things.
Consider the good tax benefits if you are thinking about purchasing commercial properties for investment purposes. Depreciation benefits and interest reductions are given to investors in commercial real estate. Investors often get ‘phantom income’ this is income that does not have tax attached. You need to know this kind of income prior to investing.
Commercial Real Estate
You can be successful in commercial real estate if you know the right ways to approach it. Keep in mind all that you learned from the article and you should have no problem having some success with your business. Constantly look for ways to learn more about commercial real estate, and identify strategies you can utilize to improve. The most business you do, the better you’ll be able to do business.