In fact, there is often more potential for profit in commercial properties than in residential properties. You may have to look a bit longer to find the right opportunity, however. Use the following tips to better understand the market so you can find the right investment for you.
Assess what you need before you look for commercial properties. Write down the things you like about the property, important features are office numbers, how many conference rooms, restrooms, and how big it is.
Location is just as important with commercial real estate as it is with residential properties. Think about the neighborhood your property is located in. Also review the expected growth of other similar communities. By calculating growth in similar areas, you will be able to ascertain whether the piece of property you are looking at is going to continue growing.
TIP! An honest broker should be willing to answer questions about how they earn their money. They must be able to talk to you about this question openly, as they make it clear that their interest is different from yours.
Look for the motivated sellers. Sometimes you will find sellers who are willing and able to sell well below the market value. You need a good deal and a seller who is excited to make it in order to purchase commercial real estate.
Different commercial brokers represent different parties. Some are full service brokers, and they work on behalf of landlords and tenants. Others are agents who represent only tenants. You may benefit significantly better from hiring the services of a broker working with tenants exclusively, as he has significantly more experience representing tenants successfully.
Dual Agency
TIP! Before you start, find the right financing for your needs. The process of getting a commercial loan is vastly different to that of a residential mortgage.
If the agent you are thinking of hiring for your commercial real estate transaction gives you any disclosure forms, make sure you read them carefully. Never neglect the fact that you may be dealing with a ?dual agency.? In a dual agency the Realtor represents both parties of the transaction. This will mean that the agency will work with the landlord and tenant simultaneously. If this is the case, and the agent is a dual agent, this should be known to both parties and agreed to by both parties.
Standard release forms are not something you should rush to sign. There are many dishonest people out there that may add additional covenants into the lease without your knowledge. By carefully reading the document, you could avoid the pains associated to certain standard commercial leases.
Do not hire a broker without finding out more about their past experience within commercial property. Be sure that they specialize in the area that you are buying or selling in. When you find the right broker, make sure your agreement is exclusive.
TIP! In the beginning, you may find it necessary to spend a great deal of time handling your investment. First you will need to find a property that you think is worth purchasing, and you may have to remodel or repair it.
When considering properties for your investment portfolio, abide by the principles of feng shui. Spaces that allow energy to flow freely, without obstacles, also appeal to buyers.
Financial Statements
When obtaining financial for commercial real estate ventures, you need to have your personal and business financial statements available. Not having your own financial statements in order will make a poor impression on the bank, possibly making them turn down your loan application.
TIP! Whether you are buying or selling, don?t shy away from negotiation. Ensure that your opinion is known, and wrangle for the best price you can get on the property.
When you begin to invest, it is wise to only have one investment in mind at a time. Pick out just one type of property to begin with and then give it all you?ve got. You want to be an ace investor in one property type rather than just OK at many different types.
In a new lease, you need to be aware of how the rent price will affect your investment. Decide on a rent amount before your first meeting with prospective new tenants. This way, you?ll be better able to project the profit you will likely make by renting to a tenant for a year.
A borrower must be the one who orders an appraisal in a commercial real estate loan. If someone else orders the appraisal, the bank cannot use it for the commercial loan. Plan for this eventuality and arrange for the appraisal on your own.
TIP! 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.
Before you negotiate a commercial real estate lease, you should aim to decrease the things that could be considered an event of default as much as you possibly can. Decreasing these will prevent tenants from performing a default on the lease after your negotiations. This type of situation is considered very undesirable.
Commercial Real Estate
Now you have the basics of investment in commercial real estate under your belt. You should remember to stay on your toes when it comes to commercial real estate. This way, you will be ready to jump on opportunities as soon as they arise so you can get the best return from your investment.
TIP! Bugs and rodents are always looking to ruin your property, so factor pest control into your business strategy when renting commercial property. It is even more important to look into the building?s pest control policies if you are looking to rent or lease in a region where building pests are common.
Source: http://www.maynaseric.com/before-having-dealings-with-commercial-real-estate-read-these-tips-2
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