It is true that commercial investment tends to be more profitable than residential property investment. Finding that diamond in the rough isn’t always easy, though. So, here are some tips to help you make sense of the variables involved so that you can make smart, commercial real estate deals.
Use your digital camera to take photographs of every room from all angles. Make sure your pictures clearly show any damage or defects, including carpet stains, holes in the walls or discoloration of plumbing and counter tops.
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. Properties that are near major employment centers, such as medical centers or universities, often sell more quickly and at a higher price.
When renting or leasing property, be sure to set up some form of pest control. This is especially important if the region is known for certain types of pest infestations. If this is the case, ask specifically what the landlord will do with regard to pest control.
When choosing brokers with whom to work, find out the amount of experience they have dealing with commercial properties. Make sure that the agent has the proper expertise with the type of real estate purchase or sale you are looking for. Once you’ve determined the broker is right for your needs, make sure any agreement into which you enter is an exclusive one.
You must be patient to succeed as a real estate investor. Make decisions calmly and slowly–don’t be in a rush to buy a piece of property. Don’t enter into a commercial venture hastily. You may soon regret it when the property does not fulfill your goals. It may take a year for your needed investment to come about in the market.
A property to be rented out commercially should be one that is soundly built and simple in design. These buildings give off an appearance of being well-maintained and are more inviting to potential tenants. This sort of building is virtually maintenance-free, so there will be fewer headaches for owners and tenants.
Try to keep your commercial property rentals at full occupancy. Having unoccupied spaces mean that you have to pay for their upkeep. Consider why your property has driven away tenants and try to rectify the situation.
There are many informational websites available that aim to provide new and seasoned real estate investors with the necessary information. You can never learn too much, so you should study real estate topics regularly.
Lower the risk of default by eliminating as many things that can be labeled “event of default” as you can prior to negotiating a commercial property lease. Doing so makes it less likely that a tenant can default on the lease. You don’t want tenants defaulting on your leases.
Have property professionally inspected before you decide to put it up for sale. Have any issue that the inspector finds repaired right away.
If you are in a situation where you have to choose between two attractive commercial properties, remember that size matters. Obtaining adequate financing is a major undertaking, whether you opt for a ten-unit apartment complex or a twenty-unit apartment complex. Generally, it’s like buying in bulk; the more you buy, the less each unit is.
If you are touring several properties, be sure to utilize a checklist to make things easier for you. Determine which properties initially make the cut, but once you do, let those property owners know. Don’t hesitate to tell a property owner that you’re considering other properties as well. Most property owners won’t be upset or angry; they expect you to be looking at more than one property. It might lead to a better deal.
Be certain the commercial property you are considering has good utilities access. The utilities you will need for your business go beyond electricity; you will also need water, sewer and gas, as well.
You should always know who takes care of emergency repairs. Speak with your landlord, and ask who is in charge of emergency repair work at your home or office. Have the phone numbers on speed dial, and know how long it generally takes stuff to get fixed. Make an emergency plan once you have this information. If a flood, fire or break-in interrupts your normal business day, you need to have a plan in place so that you can re-open as soon as possible.
Read the disclosures of the real estate agent you are planning to hire. Some agents work for a dual agency. In this sort of situation, the agency acts as both parts 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.
Lower the risk of default by eliminating as many things that can be labeled “event of default” as you can prior to negotiating a commercial property lease. That will cut down on the likelihood that the tenant defaults on a lease. You, of course, would not desire this to occur.
You should now be knowledgeable of the basic concepts involved in commercial real estate. Keep learning more and adopt a flexible attitude. Doing this will allow you to quickly take advantage of opportunities as they present themselves while others may not be able to. Always be prepared to jump on a profitable deal.