There are both positive and negative aspects of commercial real estate. You can earn a lot of money through real estate investments, but you can also lose your investment and end up in a worse position than you started in. You not only need to choose your properties wisely, but also your funding sources. This article will help you get the most from your real estate investment.
Be calm and patient when looking at commercial real estate. Do not go into an investment out of haste. You may soon regret it when the property does not fulfill your goals. It could take you twelve months or longer to get the deal that fits you perfectly.
When making decisions between one commercial property and another, think big. Financing may be no more difficult for the large apartment building than the small one. In effect, this is similar to an economy of scale, or also like purchasing more of an item to save money.
Choose simple, strongly constructed buildings if your plan is to purchase real estate for the sole purpose of renting or leasing it. Tenants will be attracted to these spots because they are maintained well. In addition, these properties are low maintenance because they don’t frequently need repairs, a benefit to the owners, as well as the tenants.
If you are considering leasing a property to someone else, then cover all your bases to reduce the risk of a default. If you cover all the applicable issues, then you make it far less likely that potential tenants will default on their lease. You want to ensure this doesn’t happen at all costs.
Check into having an inspector look through your property before you put that property back on the market. Any problems or necessary repair identified by a professional inspector should be addressed and fixed as soon as possible.
Do a walk-through of each property on your short list. It may be a good idea to take a professional contractor with you when you check out properties you are interested in purchasing. You can then make an initial offer and begin the bargaining phase. Before making any commitment, you should carefully evaluate each offer and counteroffer.
Put a high priority on emergency maintenance needs. Speak with the landlord about handling of emergency repairs just so you know who to call in that situation. Know the phone numbers, and be aware of their response time. Make an emergency plan once you have this information. If a flood, fire or break-in interrupts your normal business day, you need to have a plan in place so that you can re-open as soon as possible.
Dual Agency
Read the disclosures of the real estate agent you are planning to hire. Remember that dual agency is also an option. If so, the agent will represent both sides. In other words, the agent is representing both you and your landlord in the same transaction. Whenever dual agency is part of a transaction, it must be disclosed to both parties of the transaction. Both sides must also agree to the dual agency.
As previously noted, the business of commercial real estate can be challenging to succeed in. It takes a lot of time and effort–not to mention a sizable down payment–to succeed in the commercial real estate market. Even doing that, you may still lose money.