Owning commercial real estate has huge profit potential and might lead you to wealth. On the other hand, it’s not for all individuals, since the risks and necessary investments are both great.
Before you consider leasing or renting, look into whether or not pest control is covered in the lease. This is especially important if the region is known for certain types of pest infestations. If this is the case, ask specifically what the landlord will do with regard to pest control.
Consider visiting websites that contain a wealth of information beneficial to new and seasoned commercial real estate investors alike. Having a great base of knowledge will give you the tools to complete every part of the buying process with confidence, leading to solid decision making.
Commercial transactions are more complex, involved, and time-consuming than actually buying a home. However, all of this is required because it facilitates higher returns on your investments.
When interviewing potential brokers, ask them to tell you about their experience level with the type of commercial investments you are interested in. It is important that their experience fall in line with your buying and/or selling goals, so make sure to ask what their specialty is. You and this broker should enter into an agreement that is exclusive.
Ensure that the amount of money you want for your commercial property makes sense, given local market conditions. There are a variety of different factors that go into determining a property’s value.
If you desire commercial property for rental purposes, locate buildings that are simply yet solidly constructed. These spaces are more likely to fill quickly with paying tenants who are drawn towards something that is well maintained. They are also easier to keep in good repair and require less repairs, which will save you and your tenants money over time.
Make sure you have the right access that has utilities on commercial properties. Your business has its own utility needs, but you are most likely going to need water, sewer, electric and possibly even gas.
Look at the surrounding neighborhood before you decide on purchasing a specific commercial property. If you purchase it in a more affluent neighborhood chances are your business will be more successful, because the pockets of your potential clientele are a bit deeper. If the business you run caters to a lower-income demographic, buy in an area that fits your clientele best.
Have a professional do an inspection of your commercial property prior to you listing it as available on the market. If they should discover even a single issue with the property, repair or resolve it immediately.
You must know how to deal with an emergency, should it arise. Talk to the landlord about who does emergency repairs for your building or office. Learn the phone numbers and response times. In case a maintenance emergency should happen, you can use the information provided to lay out an emergency business and customer service plan to save your company’s reputation in case your business is interrupted.
Check all disclosures of the chosen real estate agent that you wish to work with. Understand the meaning of dual agency. Dual agency is when a real estate agency is responsible for the representation of both parties involved in a transaction. This means the agency works for the tenant and the landlord at the same time. You and the other party should both agree if dual agency is to be okay.
It’s up to the borrower, that’s you, to order an appraisal for a commercial loan. The bank won’t permit your use of it at a later date. Be properly prepared by ordering the appraisal directly.
Commercial real estate offers the potential for huge profits. Approach this activity as an investment of your money, but also of your time and hard work. Follow these tips to success.