Make sure you have a good idea of what types of commercial property are potentially profitable before you begin to narrow down your search. If you don’t know about the pros and cons of the various types of commercial real estate, you stand to lose a great deal of money. The advice in this article will assist you in making better and more informed decisions regarding the purchase of commercial real estate.
Take photos with a digital camera. Make sure the picture shows the defects (such as spots on the carpet, holes on the wall or discoloration on the sink or bathtub).
If you are renting or leasing, be sure to know about pest control arrangements. Look over your rental or lease agreement, and know if you are covered, especially if you live in an area with known infestations.
Commercial transactions are significantly more time-consuming, complex and involved than the home-buying process. But, you should realize that the nature of such deals is critical to maximizing the profit potential of a prospective property.
If you have two commercial properties on your short list, you should buy the larger one, if at all possible. Finding the right bank to finance you might be hard, even if you are going for a smaller building. Just think about it as the more you buy the lower you are paying per unit, so you save more in the end.
It is important to learn and understand a metric used in commercial real estate investment called NOI or Net Operating Income. Success is about staying in the green.
Check out where the utility hook-ups are on any commercial property. Your business has its own utility needs, but you are most likely going to need water, sewer, electric and possibly even gas.
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. The negotiations will become less tense and you will be able to better get an agreement on the more small problems.
If you are investigating multiple properties, make sure that you take a site checklist with you. Take initial personal responses, but don’t go further without the property owner knowing. Make sure that the owners are aware that you have other options available. Letting this fact slip may even result in your getting a more lucrative deal.
Real Estate Agent
Ensure your legal and financial safety by thoroughly examining the disclosures of a potential real estate agent. Determine if there is a possibility that he will be working as a dual agent. Dual agency refers to a situation in which a real estate agent represents both the landlord and the tenant in a commercial transaction. In other words, an agency simultaneously provides services to both the landlord and tenant. Dual agency should be disclosed and both parties should agree to it.
It is definitely possible to have significant success when investing in commercial properties. While luck can’t hurt, success in this venture will require significant work and research on your part. Of course, not everyone who enters the commercial real estate market will strike it big, but if you do your homework and adhere to the advice of this article, you have a pretty good shot.