Commercial properties are up for sale all the time; they just do not get put up as preferential listings. You have to know where to find these properties, and this article will give you the tools you need to do just that.
Before you invest heavily in a piece of property, investigate the economics of the neighborhood such as unemployment rates, income levels and local businesses. For example, buying a home near a large employment center, such as a university or hospital, will lead to a higher value and faster sale down the road.
As with other property purchases, pay attention to the three Ls: location, location, and location. You will want to focus on the actual neighborhood for starters. Look at the growth in similar areas. The ideal location is situated in an area that can sustain economic growth for many years to come.
Purchasing commercial properties is more time-consuming and complex compared to the purchase of a home. The duration and intensity is necessary if your investment is to yield a high return.
You should expect your commercial real estate investment to require a significant time commitment. Good opportunities can be found if you look, and after you have made a purchase, the property may require repairs or remodeling. Do not give up because this process takes too much of your time. Later, you’ll be rewarded for the time and money you have invested.
If you are selecting a broker, ascertain the amount of experience they have had within the commercial real estate market. Look for brokers who specialize in the type of commercial property that you’re purchasing or selling. Most brokers will require you to have an agreement to work exclusively with them.
Get the credentials of any person who will be doing an inspection on a property you are trying to buy. There are more than a few people working in without certification in the pest removal and insect fields, so make especially certain to ask for proof of certification from them. Making sure all your inspectors are certified will prevent problems from arising after the sale.
Thoroughly tour every potential property. Think about having a contractor as a companion to help evaluate the property. Submit a first offer and solicit counteroffers. Before you choose, make sure you look over your offers a few times.
When viewing multiple properties, be sure to get a checklist from the tour site. 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 fear telling the owners that you might be interested in other properties. Letting this fact slip may even result in your getting a more lucrative deal.
The new space you purchase might need some upgrades and repairs prior to occupation. This may be simple changes such as painting or rearranging furniture. However, you might have to remove or relocate some of your walls so that you can get the most out of your space. Negotiate in advance who pays for these improvements or try to get the landlord to pay for at least a portion of the costs.
Emergency maintenance should always be on your need to know list. Talk to the landlord about who does emergency repairs for your building or office. Always keep this important contact information at hand, including average turnaround times. Create an emergency plan using your landlord’s information so that you can protect customer service and your reputation in case of a disruption to your usual business.
Different commercial brokers represent different parties. So-called “full service” brokers represent both tenants and landlords, while there are other brokers that work exclusively with tenants. If you hire a broker that only deals with tenants you may be better off, they are more experienced.
If you are taking out a commercial loan, you must pay for the appraisal yourself. It is not unusual for the bank financing your investment to refuse to accept any other appraisal. Do the right thing and order it yourself.
Locating which commercial property you wish to buy is really only half of your battle. A little knowledge can go a long way.