Buying a commercial property is totally different than buying a house, so don’t treat them as identical transactions. Keep reading to discover strategies on how to come out ahead in the commercial real estate buying market.
Take digital photographs of the unit. Each photograph should clearly depict the point of contention, whether that happens to be a stain, hole or other problem.
If you are renting or leasing, pest control is important to look at. This is important in less desirable locations where rodents and/or bugs are an issue. Have your rental agent inform you of any associated policies for pest control.
If you have to choose between two different properties, consider the benefits of opting for the larger amount of space. Regardless of whether the property you decide on has twenty units or fifty, the process of obtaining financing will be the same, and in both cases will require substantial effort. Generally, this is similar to the principle of purchasing in bulk; if you purchase more units, you will end up getting a better price per unit.
Strive to keep your commercial properties occupied at all times if you choose to rent them to tenants. When you have an open space, you have to shell out the money to keep it looking great and running well. If occupancy is low, you may want to see if something is wrong with your property, and if there is, fix it.
Tour any properties you are considering for purchase. Think about having a contractor as a companion to help evaluate the property. Make a proposal early, and get into the beginning stages of negotiation. Think long and hard about the counteroffer before deciding to accept or decline.
You might have to make improvements to your space before you can use it. This might include superficial improvements such as repainting a wall or arranging the furniture more efficiently. Other changes may be more significant, such as moving walls or installing new doors. Decide in advice who will be responsible for these things and try to get landlords or previous owners to pay for some of it.
Dual Agency
Read the disclosures when you’re ready to hire a real estate agent. Remember that dual agency is also an option. What this means is that your chosen agency has an interest in buying and selling the property. This means the broker represents you and the landlord during the transaction. If dual agency is the case, it should be out in the open and both the landlord and the tenant should be in agreement with the arrangement.
Regarding commercial loans, it is the borrower’s responsibility to obtain an appraisal. If someone else orders an appraisal for you, the bank may not accept that appraisal. Cover your bases and order the appraisal yourself.
Always assure yourself of any company’s intentions, making sure they take a primary focus on your own needs, rather than an apparent consideration for only their firm’s income. Working with the wrong agency could cause you to commit mistakes and lose money.
It is prudent to consult a tax specialist before purchasing real estate. 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. Try to find a location that does not have high taxes, you can consult with an adviser for more information.
Assess your broker by discussing what they see as a successful transaction or, on the other hand, a failed one. Ask the person what criteria is used to gauge the success of results. Ask them to explain the methods and techniques they employ. Don’t work with any real estate broker whose beliefs and methods aren’t in line with your own.
Keep in mind that a property will only last so long. You could make a big mistake by ignoring what you may eventually have to spend in order to keep up with the upkeep of the property. The building may need repairs or updates to its systems. Any building has phases like this, although some do so more frequently than others. Before investing in commercial property, determine how you will handle the need to repair the building over time.
As you have read, there are many things to know when you shop for your commercial real estate. Be certain that you apply the advice from the preceding paragraphs to get fair deals that meet your needs and expectations of the property you deal with.