Investing in commercial real estate offers a world of opportunities, but in many cases it is well worth the hassle. But, the rewards you reap in the end make it all very worthwhile. The following article will help you propel your real estate venture further.
If you’re a buyer or if you’re a seller, it’s important that you negotiate. It is important that your concerns and opinions are heard and recognized by the other parties; you must always put forth the effort to ensure fair pricing for the commercial property.
Ask any potential broker about what experience they have had with commercial property before choosing someone to represent your interests. Make sure that they are experts in the area in which you are selling or buying. Then if they meet the criteria you are looking for, you can agree to work with that broker exclusively.
If you’d like to rent out the properties you purchase, it’s best to buy a simple building with solid construction. These types of buildings attract tenants more quickly than other buildings, as prospective tenants know that the building is less likely to have maintenance issues. These types of buildings are easier to fix for everyone and they might not need as many fixes.
You should examine the surrounding neighborhood of any commercial real estate you may be interested in. If you purchase it in a more affluent neighborhood chances are your business will be more successful, because the pockets of your potential clientele are a bit deeper. However, if your services are more frequently utilized by people of lower socioeconomic brackets, be sure to find a neighborhood that suits it.
Pay for professional inspections of your commercial property before you put it on the market. If there is anything wrong with your property, have it fixed right away.
Emergency maintenance should always be on your need to know list. The landlord in the building where you have your office will be able to provide emergency repair contact information for you. Have the phone numbers on speed dial, and know how long it generally takes stuff to get fixed. Use any information you can get from your landlord so contingencies are ready for the times your normal business operations are interrupted so you can safeguard your customer service and your reputation.
Dual Agency
Carefully peruse the disclosure statements issued by the real estate agency you intend to hire. One thing you should specifically watch out for is dual agency. Your real estate agency will represent each side of the transaction. This means the broker represents you and the landlord during the transaction. Dual agency must be disclosed by both parties and they need to agree to it.
Regarding commercial loans, it is the borrower’s responsibility to obtain an appraisal. Your bank will refuse the appraisal if you try to submit it. So, cover all your tracks and make sure you are the one who orders the appraisal.
Consider any tax deductions you might get from your commercial real estate investment. Not only are there interest deductions, but also depreciation benefits to be aware of. Other investors deal largely with “phantom income” – income that is not paid in cash, yet is still taxed. It is important that you become familiar with this particular kind of income before you make any investments.
Take the time to find a good agency who actively believes and demonstrates that the client comes first. Otherwise, it might cost you a lot of money in the future for something you could have easily avoided.
Ask your broker to explain the methods he uses to negotiate deals before hiring him. Ask them what specific training, expertise and professional experience they might have. You can also double check that their methods are ethical, and that they have success in finding and negotiating the optimum deals. Have them provide you with examples of negotiations they’ve engaged in previously, both good and bad.
Inquiring how a real estate agents earns his or her money is a great tip you can use to find an honest broker to deal with. Discussing this openly is something he should have the ability to do, and he can flat out let you know that his best interest isn’t the same as yours. Once you understand how the broker profits from the transaction, you can choose one whose profit centers align with your business goals.
As previously mentioned, purchasing commercial properties has the potential for good profit. The suggestions presented in this article should help you avoid some of the most common pitfalls, and move forward toward success.