A person that is new to the realm of commercial real estate will need quite a lot of knowledge before getting started. One great way to learn is to seek a collection of excellent tips that provide a wealth of information on the concepts involved. Let the following advice lead you to more successful commercial real estate ventures.
Use a digital camera to take pictures. Include all the defects in the photo, such as carpet stains, or holes in the walls.
Pest Control
Figure pest control into your rented or leased commercial real estate property costs. This is especially important when an area is known to have pest and rodent problems. Prior to signing a lease, ask your agent what the current pest control policies are.
A good starting point for people looking to purchase real estate is to go online and scour the treasure trove of beneficial information that can help new investors, as well as seasoned professionals. It is always best to work with as much information as possible, so take the time to absorb everything you can when working with commercial real estate.
Commercial Property
There is much more time and work involved in purchasing a commercial property rather than a residential property. Although commercial property purchases take longer you will normally receive a higher return on the investment.
Make sure that you know and understand what “NOI” (Net Operating Income) is. Staying in the positive is what you need to do to succeed.
If you own commercial properties for rent, you should always attempt to keep them filled. If you have open spaces, then you are the person who will be paying for their upkeep and maintenance. If you have multiple unoccupied properties, try to determine the reasons why, and rectify the problems that are keeping tenants from renting the spaces.
Try to carefully limit the situations that are specified as event of default criteria prior to executing a lease for commercial property. Your tenant will be less likely to default on the lease if you do this. This is a bad thing, so do what you can to minimize the chance of it happening.
Thoroughly tour every potential property. Think about taking a contractor that’s a professional with you while you check out different properties. Start the negotiations, and make the necessary preliminary proposals. Think long and hard about the counteroffer before deciding to accept or decline.
Write an easy-to-understand letter of intent, focusing on the biggest issues. You can worry about the little things later on. The negotiations will become less tense and you will be able to better get an agreement on the more small problems.
Dual Agency
Make sure you try to read any disclosures for your agent. One thing you should specifically watch out for is dual agency. Dual agency in real estate is when the agency works for both parties. This means that the agent is representing the interests of the lessor and lessee simultaneously. Dual agency should be disclosed and both parties should agree to it.
Find out how your real estate agent conducts negotiations. Inquire as to their training and experience. Look for a broker who cares both about ethics and helping you succeed. Ideally, he or she should be capable of helping you get good deals without resorting to immoral or illegal activity. Ask for examples of successful and unsuccessful past negotiations.
Do your research so you know ahead of time if you will have issues with the environment surrounding your property. You’ll be liable for cleaning up after environmental incidents. Are you considering a property that is in a flood zone? Make sure you think it over! Try contacting local environmental agencies that can give you important information regarding the area you’re thinking about buying a property in.
The hints and tips that were given to you in this article should have provided you with the knowledge to get a successful start on your venture into the purchase or sale of commercial property. This collection of tips can help you better your selling or buying technique in commercial real estate.