Commercial real estate purchasing differs from purchasing a house. This article provides valuable advice and tips that can help you make the best and most profitable decisions.
Negotiating is essential. Make your voice heard and strive for fair market value pricing.
Take photographs of the property. Be sure that you have any and all defects present on the pictures you take (things like holes, discoloration, or spots).
Before you sign a lease, find out about pest control. In some areas, in particular in areas with known populations of pests, this is a very important concern.
Your investment may require substantial amounts of your individual time and attention in the beginning. Although the investment might be a tremendous opportunity, it will only be good if you take care of any repairs or perhaps do a bit of remodeling. Don’t throw in the towel due to the massive hours needed. Your efforts will be rewarded.
Be certain the commercial property you are considering has good utilities access. Your business has utility needs of its own, but you will also need water, electric, sewer and maybe even gas.
Look into the neighborhood you’re planning on buying property in. In general, it’s better to locate a business in a richer area because rich customers obviously have more discretionary income. If your business is a bit more shady, like a rent-to-own store, payday loan outlet, or pawn shop, it’s better to locate in a poor neighborhood.
Before you negotiate a commercial real estate lease, you should aim to decrease the things that could be considered an event of default as much as you possibly can. Doing so makes it less likely that a tenant can default on the lease. This type of situation is considered very undesirable.
Have your property inspected before you list it for sale. You can fix any problems right away so you have the best available property.
If you want to sell a property, advertise it locally and on a wider level too. Many people target their advertising to local buyers only, thinking that those buyers are their market. Some private investors will be interested in properties outside of their areas if the price is low.
Before making a commitment, you should request tours of any potential properties. Bring a contractor along so that you don’t forget to inspect any important features. Submit a first offer and solicit counteroffers. Before making any commitment, you should carefully evaluate each offer and counteroffer.
If you are considering more than one property, be sure to obtain a checklist for the tour site. Be sure to take the initial proposal responses, but do not proceed without making the property owners aware of what is going on. You may want to offhandedly let the owners know that theirs is only one of a few properties in which you are currently interested. It could even get you a good deal.
You might need to make improvements to your new space before you can use it. These changes could simply be cosmetic ones as simple as a new coat of paint or moving the furniture around. However, many people find they need to take out or add walls to make modifications to the basic floor plan. Decide in advice who will be responsible for these things and try to get landlords or previous owners to pay for some of it.
Emergency Repairs
Emergency repairs should be a high priority on your list. Inquire with your landlord about who handles the emergency repairs in the space you rent. Know their phone numbers and also what their likely response time is going to be. 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.
Take the time to find a good agency who actively believes and demonstrates that the client comes first. Working with the wrong agency could cause you to commit mistakes and lose money.
Consult your tax adviser before buying your first commercial property. You adviser can help you calculate the overall cost you will incur in making the purchase, and what portion of the income deriving from the property will be taxable. Utilize the advice given to you by your tax adviser in order to locate a property in an area where your investment will incur the least taxes.
As this article demonstrates, finding good opportunities in commercial real estate is dependent on many things. Use the ideas in this article to inform you as to how to approach your next commercial real estate purchase.