Industrial property and other commercial properties are going up on the market all the time, but this type of property does not get preferential listings like regular homes. The advice presented in the following article will enlighten you on how to find your way through the real estate market to locate these industrial and commercial properties.
Don’t make any big real estate purchases until you’ve evaluated the unemployment rates, income levels, and expansion rates of the area. Commercial property near hospitals or schools have higher property values; these properties are also easier to sell.
You should take numerous, high-quality photographs of the property. Be sure that the pictures show any current problems with or damage to the home.
Unit Building
Think larger when you’re thinking about two commercial properties that are viable. Getting the financing you need is going to be complicated whether you choose a five-unit building or a fifty-unit building. Generally, this is much like the principle of buying in bulk; the more units you buy, the lower the price per unit.
When interviewing potential brokers, ask them to tell you about their experience level with the type of commercial investments you are interested in. Don’t use a broker who doesn’t specialize in the type of real estate investment you’re interested in. You should be sure to enter into an exclusive agreement with that broker.
When renting out your own commercial properties, keep in mind that is always best to have them occupied. Vacancies cost you money, because you have to pay for maintenance and upkeep without drawing income from them. If you have several properties open, you should ask yourself why, and attempt to correct the issues that may be driving out your tenants.
Make sure the property you are interested in has access to utilities. Your business has its own utility needs, but you are most likely going to need water, sewer, electric and possibly even gas.
Try to carefully limit the situations that are specified as event of default criteria prior to executing a lease for commercial property. Doing so makes it less likely that a tenant can default on the lease. This is something you want to avoid.
You should put an ad out for your commercial real estate when it is on sale, do it locally and out of town. Many sellers mistakenly assume that their property is only interesting to local buyers. In many cases, a private investor will be interested in a property even if it’s not in their area, so long as its price is a good one.
Appraisal Yourself
If you are taking out a commercial loan, you must pay for the appraisal yourself. It is not unusual for the bank financing your investment to refuse to accept any other appraisal. Order your appraisal yourself to ensure that you will be eligible for commercial loans.
When you are first starting out in real estate investing, the best thing is to keep it simple and start with one investment strategy at a time. Choose one property type you would like to start with and give it your undivided attention. You want to be an ace investor in one property type rather than just OK at many different types.
If you want to invest in a piece of commercial real estate, think about the kind of tax breaks and benefits you might receive. Depreciation benefits and interest reductions are given to investors in commercial real estate. However, sometimes an investor can receive taxed income that is not taken as cash, otherwise known as “phantom income”. Before investing, become more familiar with this sort of income.
Once you are sure which commercial property you want to choose, you are by no means finished. There is still so much more to do, and to learn. Information can help you find success.