Purchasing commercial real estate requires new strategies and a different knowledge base compared to buying residential properties. The following tips will assist you in making the best commercial real estate purchases.
Before you buy or sell a commercial property, find out several key economic indicators for the region, including trends in unemployment and income, as well as major employers in the region. Properties centrally located near universities and hospitals will have a consistently higher value, and it will sell more quickly.
Pest Control
Before you consider leasing or renting, look into whether or not pest control is covered in the lease. Especially when you rent in an area known to be infested by bugs or rodents, ask your rental agent about pest control policies.
When you are picking a broker, make sure you know if they are experienced within the commercial real estate market. Make sure they are specializing in the desired area that you’re selling or buying in. Most brokers will require you to have an agreement to work exclusively with them.
The Net Operating Income, or NOI, is one metric you need to master for success in commercial real estate. Make sure you are staying in the black to be successful.
You should be certain that your asking price is a fair offer for your piece of real estate. A variety of different criteria require consideration in order to increase or decrease your property value.
Be careful to choose commercial properties that are solidly and simply constructed if you plan to use them as rental properties. These are the most likely to quickly invite tenants into the space, because they know it is well-cared for. Not are the buildings more sturdy, there will be less maintenance issues for the owner and the tenant.
Make sure you have the right access that has utilities on commercial properties. The utilities you will need for your business go beyond electricity; you will also need water, sewer and gas, as well.
Take a tour of properties you are considering. Consider going with a contractor when you are looking at places you want to buy. Put forth your initial proposals, then open the table for negotiations. Give a bit of thought to the counteroffers before deciding to accept the offer, make a counteroffer yourself or walk away.
Establish your goals and needs before you start looking at properties. You should write down the features you are looking for, such as size or settings.
Dual Agency
Scrutinize any disclosures made by a real estate agent whom you intend to hire. Remember that a dual agency could occur. Dual agency means the real estate company is representing both the seller and the buyer in a property transaction. This means the agency works for the tenant and the landlord at the same time. If there is a dual agency, everyone should be honest about it and find an agreement.
When obtaining a loan for commercial real estate, it is up to the borrower to directly request an appraisal. The bank won’t let you go back and order it later. Order it yourself to cover your bases.
If you are novice investor, you should start off with just one single type of investment. You want to only choose one property type to give your undivided attention to. It is better to do your best at one type than to be average at many types.
Check the company’s reputation for customer service before you deal with them. Otherwise, you could be in for additional money later on due to their mistakes which could have been avoided in the first place.
As you are now aware, a number of factors must bear consideration in your commercial property hunt. Embrace this article’s advice to ease the process of finding your business’s future home.