Commercial property is a very exciting endeavor, however, it takes a ton of work. Things like where to begin and how to maintain it can be the first of many questions you might think of when thinking about commercial real estate. Since it could be really complicated to own your own commercial property, you need all the information you can get. By reading this article, it can help shed some light on what you need to do to be successful.
Before purchasing any property, you should investigate its area to determine the average income level, unemployment rate and whether or not that area is growing. Property that is located near a large business, a college, or a hospital has better resale value and will often sell easier.
When dealing with commercial properties location is everything. For example, consider the surrounding area and local neighborhoods. Also, consider local growth projections. You need to be sure that in five to ten years later, the area will still be growing.
When choosing between two different types of commercial properties, it’s best to look at things on a bigger scale. Finding adequate financing on a piece of property takes time and patience. Just think about it as the more you buy the lower you are paying per unit, so you save more in the end.
When interviewing potential brokers, ask them to tell you about their experience level with the type of commercial investments you are interested in. Make sure that their particular business focus includes what you are interested in. Entering into an exclusive contract with that particular broker is a good idea.
When renting out your own commercial properties, keep in mind that is always best to have them occupied. Remember that if you have empty units, you have to take care of them. Maintenance costs on empty units can add up. If you have lost several tenants or can’t seem to attract them in the first place, there must be a reason. It is your job to figure out the problem and correct it.
Write an easy-to-understand letter of intent, focusing on the biggest issues. You can worry about the little things later on. This lets you get the bigger issues out of the way first and makes small issues simpler to complete.
You should have a necessary-to-know list, and emergency maintenance must always have a place on that list. Ask the landlord who handles emergency repairs in your office or building. Have their phone number handy and know how long it will take them to arrive in an emergency. Use the information from your landlord to prepare an emergency plan to protect your reputation and customer service for the times when your normal business flow is disrupted.
In commercial real estate, there are different kind of brokers. A full service broker works with both the tenants and the landlord. Some agents represent only the tenants. You may benefit from using a broker who works exclusively with tenants, due to the singular focus.
Don’t purchase anything until you’re certain that the company you’re dealing with is looking out for your interests. If you don’t do this, you might get taken advantage of or wind up paying much more money over time.
Don’t be afraid to question any potential real estate agents, and ask for references. Ask the person what criteria is used to gauge the success of results. Strive to understand the various strategies that they employ. If you are in disagreement with a broker’s strategies and beliefs, you should not work with that person.
Find out how different real estate agents negotiate before you choose one. Much like you would interview a prospective employee, question their experience and training. Ensure that the broker fights tooth and nail to get you the best price on your property, but make sure he or she doesn’t use underhanded tactics. Ask for examples of successful and unsuccessful past negotiations.
Clearly, owning and purchasing commercial property takes work, effort and research so that your experience is as favorable as possible. It’s also truth that you must be persistent. By applying the advice of the previous paragraphs, you can start easily and safely down the path to commercial property ownership.