Deciding to purchase some commercial real estate can be an exciting proposition. This article will serve you as a guide to buying commercial real estate in today’s ever-changing market. The following tips will help make you more confident in your commercial property searches.
Pest control is something you should look into when renting or leasing a property. It is even more important to look into the building’s pest control policies if you are looking to rent or lease in a region where building pests are common.
There are many websites available that offer information to investors; therefore, learn all you can before searching for commercial property. You can never know too much about commercial real estate, so keep learning!
Pay attention to the location of a property. Take into consideration the class level of the neighborhood, other commercial properties surrounding it, and accessibility. You will also want to calculate growth expectations by comparing similar neighborhoods. Do not buy a property that is located in a neighborhood likely to take a wrong turn in the next five years.
If you are hesitating between different properties, buy the larger of the two. Finding the right bank to finance you might be hard, even if you are going for a smaller building. The concept here is the same as any other situation where you are purchasing multiple things. The more you purchase, the less you will pay for each unit.
Make sure that the broker you decide to work with has experience in the commercial market. Don’t use a broker who doesn’t specialize in the type of real estate investment you’re interested in. At that point, you might want to consider entering into an exclusive listing with that agent.
See to it that the price that you ask for in real estate is realistic. There are a ton of variables when it comes to what will give you success.
Be certain the commercial property you are considering has good utilities access. Every business’ needs are different, but at a minimum, most businesses will need power, sewer and water services.
When buying commercial property, think about the socioeconomic status of the neighborhood around the building. Your business might do better in affluent communities, since your prospective foot traffic has more money. However, if your products or services cater more to those with less funding, consider a location in a neighborhood that fits your potential clientele.
Advertise your property for sale locally and outside your region. A lot of sellers fall into the misconception that only the local buyers are interested parties in potential purchase. In fact, the interest level can expand far beyond the local scene as private investors expand their interest. These investors are searching for affordable property and may be interested in yours.
Go on a tour of all potential properties. When looking at a property that you are thinking of purchasing, it’s a good idea to have a licensed contractor accompany you. Make the preliminary proposals, and open the negotiating table. Give a bit of thought to the counteroffers before deciding to accept the offer, make a counteroffer yourself or walk away.
When viewing multiple properties, be sure to get a checklist from the tour site. Allow yourself to consider the initial proposal responses, but avoid carrying it any further without informing the current owners. Do not be shy about mentioning that you’re also looking at other properties that day. Making them aware you have other options may get them to accept a lower offer.
Establish your goals and needs before you start looking at properties. You should write down the features you are looking for, such as size or settings.
Plan on doing some improvements to your new commercial space before you can inhabit it. The improvements can just affect surface appearance like painting the walls or moving furniture around. However, you might have to remove or relocate some of your walls so that you can get the most out of your space. You should pre-negotiate the cost of these alterations with the landlord, and try to get them to contribute towards at least part of them.
Dual Agency
Read the disclosures of the real estate agent you are planning to hire. Be aware of the possibility of dual agency. When dual agency exists, the agency advocates for both parties in the transaction. This means that the agent is representing the interests of the lessor and lessee 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.
Armed with these tips, you are ready to step into the world of commercial real estate. If you felt prepared before, you surely must feel like a pro by now! These tips will provide you with new ways to get started, and enhance your current commercial real estate system so you can increase your results.