Be calm and patient when looking at commercial real estate. Do not be hasty about making a investment decision. You’ll regret it quickly if your lack of research results in a property without much re-sale value. You should be prepared to wait an entire year before a worthy investment becomes available to you.
As with other property purchases, pay attention to the three Ls: location, location, and location. Take the neighborhood of the property into consideration. Consider how this area is growing in comparison with similar areas in the region. You want to make sure that in 5 or 10 years down the road, the area is still a descent and growing area.
Be patient and calm while you navigate purchasing commercial real estate. Don’t jump into a new investment too quickly! If you buy a property that doesn’t meet your needs, you’ll sorely regret it. Stay patient; it could take a year or more for the perfect property to materialize.
Make sure your asking price is realistic. A variety of different criteria require consideration in order to increase or decrease your property value.
If your real estate deal includes inspections (and it always should), make sure to ask to see the credentials of all of the inspectors. Many people in certain fields are not accredited, including pest and insect removal services. By hiring an experienced professional, you’re less likely to run into problems after you buy the property.
Be sure you position yourself well when it comes to negotiating any lease for commercial real estate, you want to do things like decrease what could be considered as a default event. This decreases the chances that the tenant will default on the lease. This type of situation is considered very undesirable.
Make sure that you know and understand what “NOI” (Net Operating Income) is. Having positive numbers is the only way to ensure success.
When selling commercial property, advertise locally and outside of your region. Do not assume that only local investors will be interested. There are many private investors who prefer to purchase reasonably-priced real estate that is not local to where they reside.
When you are composing a letter of intent, you should emphasize simplicity by negotiating on the bigger issues first, then addressing the minor issues later in the negotiations. This will help to reduce some of the tension in initial negotiations and will also make gaining agreement on some of the smaller issues much easier.
For a commercial property you plan to rent out, make sure it is a solid construction with a simple design. Tenants are more likely to move in when they know the property is well taken care of. They are also easier to keep in good repair and require less repairs, which will save you and your tenants money over time.
If you are investigating multiple properties, make sure that you take a site checklist with you. Make sure to advise the property owners when you want to take the next step past the first proposal responses. 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 can also get you a great deal on the property you’re touring!
Consider what youR actual goals are before you begin to invest in commercial real estate. Identify which features in a commercial property are high value to you, and make a list. This can include the number of floors, units, square feet, the building layout, and anything else that is important to you.
You may need to make some changes to the commercial space you just rented before moving in. The changes don’t have to be extensive. You may just want to repaint or rearrange furniture. In many cases, the changes include moving walls to rearrange the floorplan. Talk to your landlord about these improvements. Try to negotiate a deal where the landlord pays for some, if not all, of the cost of improving your space prior to moving in.
The area in which the property is located is important. If you buy property in a very affluent area, your business will likely be successful, because your clientele will be better able to afford what you are selling. However, if your services are more frequently utilized by people of lower socioeconomic brackets, be sure to find a neighborhood that suits it.
Before paying any agent, check his or her disclosures; these can tell you a great deal about the agent’s character and ability. Be aware of the possibility of dual agency. What this means is that your chosen agency has an interest in buying and selling the property. This means that the agent is representing the interests of the lessor and lessee simultaneously. Dual-agency situations require disclosure and the agreement of both parties.