Navigating your way through commercial property transactions can be challenging, unless you have done a lot of homework. Read on for ideas and suggestions that will help you.
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. If you’re looking at a property that’s close to things like a university, employment centers, or a hospital, they’re likely to sell fast, and at a high value.
Don’t be led by hype and fads when searching for commercial real estate. Never rush into an investment. If you buy a property that doesn’t meet your needs, you’ll sorely regret it. It could be a year-long process before you begin to see investments in your market pay off.
As with other property purchases, pay attention to the three Ls: location, location, and location. For example, consider the surrounding area and local neighborhoods. Look at the growth of areas that are similar. Do not buy a property that is located in a neighborhood likely to take a wrong turn in the next five years.
Engaging in a commercial transaction often takes more time, and is more difficult than simply buying a home. Although commercial property purchases take longer you will normally receive a higher return on the investment.
Make sure that you’re not asking for an unrealistic price for your property. A variety of different criteria require consideration in order to increase or decrease your property value.
Check out where the utility hook-ups are on any commercial property. Every business requires certain utilities, most commonly things like water, sewage and electricity.
Commercial Real Estate
Consider the surrounding area when you buy a piece of commercial real estate. Affluent neighborhoods tend to have residents with larger budgets, making a commercial real estate property in such an area is a great choice. Or if your services are for the less wealthy, purchase in this type of area.
Prior to listing your commercial property for sale, have it checked out by an inspector with at least five years of experience. If the inspections turn up any problems, remediate them before listing the property for sale.
In writing letters of intent, focus on major issues to begin with. Many smaller issues will fall in line on their own with this approach. If not, you can work them out later. This will make negotiations less tense and make gaining agreement on the smaller issues easier to complete.
When you’re shopping multiple properties, prepare a checklist to make the task easier. 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. Make sure that the owners are aware that you have other options available. It may help get you a better deal.
Have a list of goals on hand before you start searching for commercial real estate properties. Write down the features of a piece of property that are the most essential to you, such as how many square feet it must be and the number of specific rooms it should have, including conference rooms, offices, and restrooms.
You might have to make improvements to your space before you can use it. It could be something simple, such as paining walls, rearranging appliances or furniture or hanging things. Normally, however, it may be something a little more involved like walls being moved. Plan on negotiations with the owner of the property to see if all, or part, of the costs can be covered by said owner.
The advice outlined above lays out a number of useful strategies applicable to both buying and selling commercial real estate. If you apply the information from this article, you will be more prepared to make profitable decisions when buying or selling properties.