When developing your real estate investment strategy, you must formulate a clear picture of the types of commercial properties that you will pursue. You might lose a great deal of money if you make an ill-advised choice in commercial real estate property. The tips here will show you how to make the right decisions.
Be sure to negotiate on the fact of what you are, the seller or buyer. Make sure that you are heard and that you fight for a fair price for the property.
There is much more time and work involved in purchasing a commercial property rather than a residential property. Remember that the time and efforts you are investing will pay off.
When deciding between two viable commercial properties, it is best to think on a larger scale. Financing may be no more difficult for the large apartment building than the small one. You may have a better price, figured per unit, on the larger apartment complex than on the smaller one.
When you are picking a broker, make sure you know if they are experienced within the commercial real estate market. Verify they have experience in working with the type of properties you are interested in. Make sure you find an exclusive agreement that works for you and your broker.
Empty Units
Keep your rental commercial properties occupied. Remember that if you have empty units, you have to take care of them. Maintenance costs on empty units can add up. If you have more than one property without someone in it, think about why that is, and fix any problems that might be occurring.
Make sure that the commercial property has access to all utilities needed. The utilities you will need for your business go beyond electricity; you will also need water, sewer and gas, as well.
You also want to take into consideration the neighborhood that your real estate is in when you purchase commercially. For example, if you’re offering high-priced goods or services, you might want to purchase property in wealthier areas where people are likely to be able to afford to buy from you. If your business services will do better in a poor neighborhood, buy property there!
Try to decrease potential events of defaults before negotiating a lease. This will greatly lessen the likelihood that the tenant might default. You don’t want tenants defaulting on your leases.
When writing up a letter of intent, make sure to keep your offer simple and straightforward, focusing on the bigger issues at first and then figuring out those pesky, little details later. This way, negotiations will be smoother, and agreements on the small issues are more likely to be reached.
While searching through different properties, make a checklist of each tour you went on. Make sure to advise the property owners when you want to take the next step past the first proposal responses. Don’t fear telling the owners that you might be interested in other properties. This could help you score a better deal.
Dual Agency
Before hiring any real estate broker, read all of his disclosures. Make sure you understand the potential for the existence of dual agency. Dual agency refers to a situation in which a real estate agent represents both the landlord and the tenant in a commercial transaction. This means the real estate agency will work as the landlord and the tenant. 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.
You should meet with a tax adviser before you buy anything. A tax adviser can let you know how much money the buildings will cost you, and the amount of your income that will be taxable. Work together with your tax adviser to locate an area that have low taxes.
The information you just read proves that success is possible in the real estate market with common sense and hard work. Making money in the commercial real estate market is a combination of having the right info, having the right talent, and a nice helping of luck, as well. Although some people will fail in their venture, you can significantly enhance your chances of being successful if you implement the hints and tips you were given in this article.