You can make a lot of money in the commercial real estate market. But, you must realize that due to the stakes of commercial real estate, this business is not suited for everyone.
Take plenty of pictures of the building. Make certain that the pictures show irregularities, such as holes or bad paint on walls, carpet stains, and bathtub or sink discoloration.
Engaging in a commercial transaction often takes more time, and is more difficult than simply buying a home. Although commercial property purchases take longer you will normally receive a higher return on the investment.
In the beginning, a great deal of time might be required to spend on your investment. First you have to hunt down a good deal, and then, after your purchase, you may be required to complete some repair work or remodeling. Don’t give up just because this is a lengthy process that gobbles up large portions of your time. You will be rewarded later.
Once you have narrowed your choices down to two major contenders, you should expand your decision to include the big picture. Getting adequate financing is very important in undertaking an investment that pertains to a ten or twenty unit apartment complex. Generally, it’s like buying in bulk. As the number of units purchased goes up, the cost per until will go down.
When selling a property, you should make certain that whatever price you set is realistic. 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.
Occupation is the key when you purchase commercial properties for rent. You are responsible for the expenses associated with keeping your unoccupied spaces updated and maintained. If you notice that you have several vacant properties, try to find out why, and look at ways of enticing tenants back in.
Do a walk-through and close evaluation of each property you are considering. It’s a good idea to hire a building contractor to come with you and do on-the-spot inspections of properties you are considering. Start negotiations by making a preliminary proposal. Consider counteroffers carefully prior to responding.
While searching through different properties, make a checklist of each tour you went on. Don’t go any further than 1st round proposal responses, unless you let the owners of the property know. Don’t be afraid to casually tell the owners that you are looking at other properties, too. Letting this fact slip may even result in your getting a more lucrative deal.
One of the most important things you should be aware of is emergency maintenance. You should ask your landlord who is in charge of handling emergency repairs. Keep their numbers updated, and know how long it takes them to arrive on average. Develop an emergency plan for those times when disruption in your services occurs. This advance planning can save your business reputation if an emergency strikes.
Dual Agency
Scrutinize any disclosures made by a real estate agent whom you intend to hire. Try to beware of dual agency. What this means is that your chosen agency has an interest in buying and selling the property. Dual agency occurs when the landlord and the tenant hire the same agent. Dual agency is something that should always get disclosure, and both parties involved should be in agreement with it.
No question about it, some real estate investments can be the road to tremendous commercial profit. Approach this activity as an investment of your money, but also of your time and hard work. This article should provide you with some tips and tricks that will help you succeed in commercial real estate.