This collection of general commercial real estate tips is a great place for beginners to start learning. In the article below you will see a gathering of information that can help a beginner go from enthusiastic novice to becoming a pro in this field.
Negotiate, whether you are the buyer or the seller. Be heard and fight to get a fair property price.
Research local prices similar properties have sold for before setting a price for your commercial real estate. Most appraisers can’t take all factors into account because there are an infinite number of variables involved in determining the value of a piece of property. These variables can all make your property worth less than the appraisal claims it is worth.
One of the biggest considerations in the process of attaining commercial property is to know the neighborhood of each and every prospective location. Purchasing in neighborhoods that are in the upper price per square foot range will help for successful business because the surrounding owners have more money to spend. If the business you run caters to a lower-income demographic, buy in an area that fits your clientele best.
Always have an inspector look over your commercial property before you put it out on the market. Listen carefully to the inspector’s report so that you can immediately repair any problems.
Using a checklist is useful when you have multiple properties that you are considering. Take this list with you as a reference when visiting other properties, and use it when speaking with the property owners. Do not be scared to let the owners know about other properties you have in mind. You may even get a more favorable deal!
Know what your specific needs are prior to starting your commercial real estate hunt. List the qualities that concern you most in a property (e.g. restroom facilities, conference facilities, number of units available, square footage, etc.)
You might have to make improvements to your space before you can use it. This may be simple changes such as painting or rearranging furniture. Oftentimes, moving walls and other fixtures is required to redistribute the floorplan. Negotiate in advance who pays for these improvements or try to get the landlord to pay for at least a portion of the costs.
Always include emergency maintenance on your list of need to know things. Find out from your landlord who to contact for emergency repairs, such as plumbing accidents. Keep the contact numbers handy, and ask them in advance what their response time is. Protect your employees, customers, merchandise, and even your reputation by having a good emergency plan in place that will allow you to handle unexpected events without chaos.
Borrowers are required to order the appraisal in commercial loans. If someone else orders the appraisal, the bank cannot use it for the commercial loan. Be properly prepared by ordering the appraisal directly.
Stick with a firm that is looking out for your best interests before you enter into an agreement. Otherwise, you could be in for additional money later on due to their mistakes which could have been avoided in the first place.
Before you purchase a property, talk to a tax advisor. You adviser can help you calculate the overall cost you will incur in making the purchase, and what portion of the income deriving from the property will be taxable. By adopting the adviser’s counsel and expanding your search, you can find an area for expansion and building that will not endanger your current tax liability.
Hopefully the information contained in this article will help you to build a foundation of knowledge off which you can grow to profitable heights. Use what you have learned, and you will be able to navigate the complex world of commercial real estate with ease.