Having to deal with purchasing commercial real estate can be extremely difficult and confusing for not only beginners, but also those who are more seasoned. 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.
Location is vital to commercial real estate. You will want to focus on the actual neighborhood for starters. You will also want to calculate growth expectations by comparing similar neighborhoods. You need to be sure that in five to ten years later, the area will still be growing.
Inspections are necessary before buying any piece of real estate. When arranging an inspection, be sure to check both credentials and reputation before hiring an inspector. This is true when working with pest or insect removal, since many people who are non-accredited work in these fields. Doing so, will help you avoid much larger problems after actually making the purchase.
Check a commercial property for access to electricity and other utilities; make sure there is good access. Your particular business might need additional services, such as cable, but at the minimum there should probably be sewer, water, phone, electric and gas.
You need to think over the community any commercial property is in before you commit to it. Purchasing in neighborhoods that are in the upper price per square foot range will help for successful business because the surrounding owners have more money to spend. However, if your services are more frequently utilized by people of lower socioeconomic brackets, be sure to find a neighborhood that suits it.
Before you talk about a lease in commercial real estate, make sure to lower anything that might be thought of as events of default, wherever possible. Decreasing these will prevent tenants from performing a default on the lease after your negotiations. This is something you want to avoid.
Property Owner
If you are checking out more than one property, draw up a checklist to compare the features of the different properties. Take initial personal responses, but don’t go further without the property owner knowing. Don’t hesitate to tell a property owner that you’re considering other properties as well. Most property owners won’t be upset or angry; they expect you to be looking at more than one property. The information may help you to negotiate more favorable terms on your deal.
Have a list of goals on hand before you start searching for commercial real estate properties. Think of any property features that are high priorities for you and list them down, like the number of restrooms and office, conference room availability and overall square footage.
You should have a necessary-to-know list, and emergency maintenance must always have a place on that list. Talk to the building’s landlord about the person who currently handles emergency repairs. Know what the phone numbers are, and know what the response time is for them. Use any advice you can gather from a landlord to protect your customers with properly configured emergency plans.
There are different types of commercial real estate brokers. Some agents represent tenants only, while brokers work alongside tenants and landlords alike. If you intend to rent rather than buy, retaining the services of the latter type of broker may benefit you, as tenant-only brokers know what works when representing tenants.
Borrowers are required to order the appraisal in commercial loans. If someone else orders an appraisal for you, the bank may not accept that appraisal. Be properly prepared by ordering the appraisal directly.
In the beginning phases of your career as an investor, limit yourself to working with a single type of investment. Select the type of property upon which you wish to focus, and pay close attention to your dealings. It’s better to master one type than to be mediocre at many.
Hunting for commercial property is a stressful and sometimes overwhelming situation for beginners and experts alike. This article contains some tips that will help to make the hunt less stressful, and more enjoyable and lucrative.