Investing in commercial properties is not the same game as home buying. Read this article for timely tips and advice to help drive you to success.
Location, location, location is important to consider. Pay attention to the property’s surrounding area. The neighborhood’s demographics, including socioeconomic status and age of residents, influence the success of your investment. 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 trying to choose between two good commercial properties, think big. It’s just as difficult to obtain adequate financing for a 10 unit apartment complex as it is for a 20 unit building. Generally, this is the same situation as if you were buying something in bulk, the more you buy the cheaper the price of each unit.
You must absolutely confirm that your real estate’s asking price is realistic. The value of your property is determined by an entire series of different factors.
When renting out your own commercial properties, keep in mind that is always best to have them occupied. Having unoccupied spaces mean that you have to pay for their upkeep. 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.
Eliminate as many definitions of default (i.e., actions that constitute default) as possible before beginning to negotiate a lease with a new tenant. If you are able to successfully do this, you’ll find that your probability of having the tenant within the building defaulting will be low. That is not a situation you would want to encounter.
Commercial real estate agents specialize in working with different types of clients. Full service brokers work with both landlords and tenants and there are agents representing tenants only. It might be more beneficial to hire a broker who works only with tenants, as he has more experience working with those searching for a property.
Tax Adviser
Talk to a good tax adviser before buying anything. A tax expert can advise you on how much the property costs and what amount of your real estate income will be taxable. Utilize the advice given to you by your tax adviser in order to locate a property in an area where your investment will incur the least taxes.
Prior to committing to working with a real estate broker, you should first determine how they prefer to conduct business. Find out about 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. A quality broker will be happy to share examples of their past work with you if you ask, including both deals that were successful and those that weren’t.
As the above article has shown, you have to consider many things when searching for commercial type of real estate. Keep this advice in mind so that you may get better deals when searching for the location of your business.