If you’re going to invest in commercial property, have some idea about what type of commercial property you are considering. By purchasing the wrong kind of property, monetary loss could be inevitable. Keep reading for a handful of ideas and advice for making more informed commercial real estate decisions.
Reach out to your investors and brokers through newsletters, or on social networking sites to show your continued thanks and interest in them. After you have finished a deal, don’t vanish from sight online.
The location of your commercial property is key to its value and its potential suitability for what you have in mind. What type of neighborhood is the property in? Compare the growth of the property’s neighborhood to similar neighborhoods around the country. You’re not only thinking about the here and now; you want to look a decade down the line too. Pick an area with the potential for sustainable growth.
Real Estate
You probably do not want to sign a lease form that is standard when you are leasing a commercial piece of real estate. Big real estate companies will sometimes slip additional covenants or requirements into the lease document, which can at times be very long. Looking through the information in detail can help you avoid any issues.
Take a tour of properties you are considering. As you tour each property, you should bring along an experienced contractor who can offer helpful input. Make the preliminary proposals, and open the negotiating table. Give a bit of thought to the counteroffers before deciding to accept the offer, make a counteroffer yourself or walk away.
Don’t ever underestimate the value of the relation between you and lenders, be them private or investors. For example, commercial properties are often sold without ever making it to a listing, so having a broad network can increase your exposure to great deals.
Whenever you are considering a commercial lease, you need to think about pest control. If you are renting a space that has known vermin problems, be sure to find out exactly who is responsible for pest control.
It is advisable to go bigger when investing money pertaining to commercial real estate. The less units a building has, the easier it will be to lease them all out. You must get commercial financing for any commercial venture, whether 5 units or 50 or more. The more units you finance, the less cost per unit!
Maintaining and cleaning commercial properties can be costly, but occasionally it is possible to save money. You have to pay for cleaning only if you are the owner of the property. Environmental clean up and waste disposal can end up costing you a lot of money. Therefore, you should ask an environmental assessment company for an environmental report. There will be fees involved; however, the savings overall will justify the expense.
Square Footage
Get clear and precise square footage numbers for any space. The usable square feet is the measurement of where business will take place in commercial real estate. Total square footage can also be used, however, this encompasses all space including unusable space and walls. Therefore, it is very important to know both types of square footage.
Using a checklist is useful when you have multiple properties that you are considering. Accept the proposal responses from the first round, but be sure to inform the property owners directly if you decide to go further in your inquiries. You may want to offhandedly let the owners know that theirs is only one of a few properties in which you are currently interested. This may help you by creating a sense of urgency on the seller’s part.
Interest rates that change constantly can be the single biggest problem facing investors in commercial real estate. Current conditions, with their unpredictable rises and falls, leave investors room to make a great profit or to suffer an incredible loss. Keep this in mind during your comparison shopping, and look to the long-term for cost analysis.
If you apply the information that you have just read, you have an excellent chance of realizing real estate success in the commercial markets. The key to success lies in learning and developing the required skills and as will most investments, an element of luck is involved. Not everyone gets rich off commercial real estate, but the above advice can help you to make the most of even the smallest of investments.