Commercial real estate can be hugely profitable and make you wealthy. Yet, not everyone can do it, there is much to gain and much to lose with every investment.
You need to figure out exactly what type of space your business needs before you start looking for commercial property to lease or buy. Know just what type of office space that you are going to use. If you plan to make your company grow, it will be a good idea to buy more space than you need while the market is low to save you some money later.
Research any real estate brokers you are considering working with, and ask questions to determine whether their visions align with yours. Learn their methods of measuring their results. Keep asking questions until the broker’s strategies are clear to you. You need to understand what these strategies are so that you can evaluate if you are comfortable with them. If your own views differ greatly from a potential broker, you two may be incompatible for a business relationship.
Get your commercial property inspected before you try to sell it. If the inspector finds any problems, you should attend to them promptly.
When shopping for an honest brokerage, ask the representative how the company makes money. The representative’s answer should be open and honest and should make it clear whether or not the interests and principles of the firm are in line with yours. It is important that you understand the benefits the firm will receive as a result of completing a transaction for you.
Your first step is to find financing. There are major differences between commercial and residential loans. These loans are actually a lot better in a number of ways. While commercial loans generally require a more significant down payment, lenders are usually more flexible about where or from whom you get that down payment.
Make certain to only put your focus on a single investment at any given time. For example, when starting out decide if you are going to invest in apartment complexes, office building, commercial land, or retail spaces. Each purchase will need your complete focus to get it under control. Pouring all of your focus into a single niche of real estate allows you the opportunity to become a master of a single trade, rather than a “jack of many”.
Commercial Loans
There are substantial differences between residential and commercial loans, one being that commercial loans require a larger down payment relative to the property’s value. Try to locate the best lenders; then try asking for any quality investments. Both of these are a great way for you to increase your changes of qualifying for a commercial loan.
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. You and this broker should enter into an agreement that is exclusive.
If you’re thinking about investing in an apartment complex, consider the fact that smaller complexes can actually be more problematic than larger complexes. That’s why many professionals warn against purchasing buildings that contain fewer than 10 units. However, each case has different issues, and the information that you have about a specific property will guide your decision.
Make sure that you know and understand what “NOI” (Net Operating Income) is. In order to be successful, the resulting number must be positive.
Pest Control
Before you consider leasing or renting, look into whether or not pest control is covered in the lease. Talk to your rental professional regarding pest control policy if you rent in a community known for bug or rodent infestation.
Be aware that not all commercial brokers are alike. Choose the real estate broker who will best help you meet your needs. For example, some brokers represent landlords as well as tenants, while others only work with tenants. You may be helped much more with a broker who just works with the tenant, as that person most likely has more experience in handling tenants successfully.
Commercial real estate offers the potential for huge profits. Make sure you have both the time and the money that is needed to give you the best chance of making a successful investment. To achieve this, heed this advice.