There are a lot of reasons many people invest in the world of commercial real estate. Make sure, however, that your decision is based on sound reasoning and a solid understanding of the market. When it comes to commercial real estate, the more knowledge you have, the larger amount of money you will make. Below, you’ll find some great tips to help you start your commercial real estate career, or to add to your already wide breadth of knowledge.

Bring your digital camera along, and use it. In the “before” photos, especially, make sure that the pictures clearly show defects such as stains on the carpet, discolorations in the tub and sink, and holes in the walls.

When deciding between two viable commercial properties, it is best to think on a larger scale. Getting the proper financing is going to the same hassle for a retail building with ten outlets as it would be for a retail property with twenty or even thirty units. This is generally like buying something in bulk, the more you buy, the less it is is per unit.

Check out where the utility hook-ups are on any commercial property. Your business may have unique utility needs, but at the very least, you probably require hookups for electric, sewer, water and most likely, gas.

Less Affluent

You should examine the surrounding neighborhood of any commercial real estate you may be interested in. A business located in a well-to-do neighborhood might be more successful, since the potential customers will be able to spend more. You might want to buy a property in a less affluent neighborhood if you are selling products or services that less affluent people would find attractive.

Lower the risk of default by eliminating as many things that can be labeled “event of default” as you can prior to negotiating a commercial property lease. This can decrease the chances of tenants defaulting on that lease. This type of situation is considered very undesirable.

Take a tour of a property you might purchase. You can even take a contractor with you to provide expert advice. Start the negotiations, and make the necessary preliminary proposals. Think long and hard about the counteroffer before deciding to accept or decline.

Keep letters of intent simple by tackling large issues before sweating the small stuff. This will make the negotiations faster and less tense, and it will also cause the lesser issues to be completed easier.

When viewing multiple properties, be sure to get a checklist from the tour site. After you collect your first proposals from all the property owners, let them all know that you’re looking at other properties before you make your decision. Do not be shy about mentioning that you’re also looking at other properties that day. This may help you by creating a sense of urgency on the seller’s part.

Emergency maintenance should always be on your need to know list. Talk to the building’s landlord about the person who currently handles emergency repairs. Keep the contact numbers handy, and ask them in advance what their response time is. In case a maintenance emergency should happen, you can use the information provided to lay out an emergency business and customer service plan to save your company’s reputation in case your business is interrupted.

Dual Agency

Carefully peruse the disclosure statements issued by the real estate agency you intend to hire. Never neglect the fact that you may be dealing with a “dual agency.” In this case, the agent is two-faced: she is representing both parties to the transaction. In effect, while you are paying the agency, they also work for the opposite side; if you are a prospective tenant, for example, the dual agency represents the landlord, as well. If dual agency is the case, it should be out in the open and both the landlord and the tenant should be in agreement with the arrangement.

Before you invest in real estate, be certain that you understand the implications regarding your taxes. For example, commercial real estate investments garner you deductions for interest on top of your benefits for depreciation. “Phantom income” is a taxed income, but not income received as cash. You should be mindful of phantom income prior to investing.

Commercial Real Estate

As stated earlier, there are a lot of exceptional reasons to look into commercial real estate investments, but being knowledgeable on the opportunities is important. Use these tips for any commercial real estate necessities so that you can boost your profits.