Purchasing commercial real estate can differ much from obtaining a home. Read on for some tips and suggestions that will help you come out ahead.
Your new space may need improvements before you can occupy it. In some cases, all that is required are simple changes like moving the furniture around or giving the walls a new coat of paint. Oftentimes, moving walls and other fixtures is required to redistribute the floorplan. Negotiate in advance who pays for these improvements or try to get the landlord to pay for at least a portion of the costs.
Commercial real estate is more time consuming, confusing and involves more than just buying a home. However, all of this is required because it facilitates higher returns on your investments.
Real estate brokers for commercial properties have different areas of expertise. For example, some brokers represent landlords as well as tenants, while others only work with tenants. You may benefit from using a broker who works exclusively with tenants, due to the singular focus.
Put your energy toward one investment at a time. Your center of attention should be placed on a specific investment, whether it is an office building, land, apartments, retail, etc. Every category expects and even needs your complete and undistracted focus. Master one type of investment at a time. Mediocre profits from several types of investments aren’t worth the effort, but major profits from one type of investment is.
Determine the negotiation methods of real estate brokers you are considering. You may want to ask them about their own experience and training. Make sure they are knowledgeable about finding good deals and that they are ethical in all their business dealings. Ask for examples of successful and unsuccessful past negotiations.
Build up a system of prospective financial partners, including local lenders and business contacts; this ensures that you always have access to the cash flow required to make a purchase. Contract with the parties to either provide part of your property income, or repayment with a fixed inters rate.
Unit Apartment Complex
If you have two commercial properties on your short list, you should buy the larger one, if at all possible. Obtaining adequate financing is a major undertaking, whether you opt for a ten-unit apartment complex or a twenty-unit apartment complex. 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.
Make sure you try to read any disclosures for your agent. There is a possibility of a condition called dual agency. In this type of transaction, a real estate agency acts on behalf of both parties involved in the deal. When dual agency happens the Realtor on behalf of both parties. Dual agency should be disclosed and both parties should agree to it.
Determine your business goals before you start your hunt for commercial property. You should write a list of which features are most important to you. For example, do you need a specific number of restrooms, a specific amount of square footage, or a conference room?
Look for property that has more units. More units equal greater opportunity to earn more money. A lot of investors are unwilling to even bother with properties with few units, and most experts also suggest that more units generally means more money.
Make sure you consider size and square footage when checking out potential properties for an expanding business. Unless you plan to move your business in several years, you should purchase a piece of commercial property that will allow your business enough space to grow.
Before you buy commercial real estate, make sure you have a firm vision of your goal for the property. Is it your intention to put your own personal business within the property, or is leasing it out in your plans? Before you even start looking for a property, your goals should be clear and specific.
When you’re trying to decide which broker you should work with, take their experience in commercial real estate into account. Verify they have experience in working with the type of properties you are interested in. You need to get into a type of exclusive agreement with your broker.
As you can now see, there are many things that you need to consider, when buying commercial real estate. Keep the strategies in this guide in mind to help you get a good deal that will fit your needs in selecting the building you need for your business.