Navigating your way through commercial property transactions can be challenging, unless you have done a lot of homework. Read on for ideas and suggestions that will help you.
Use of a digital camera is a simple and effective strategy. Be sure that you have any and all defects present on the pictures you take (things like holes, discoloration, or spots).
If you want to learn a lot about real estate, check out several websites that offer a lot of information to both experienced and new real estate investors. You can never know too much about commercial real estate, so keep learning!
The location of the property is the most important factor to consider when investing in commercial real estate. When investing in a property, consider what type of neighborhood it is located in. Compare the growth of the property’s neighborhood to similar neighborhoods around the country. If you make an investment in real estate, it is in your best interest to ensure that your property is in an area that will still be growing in five to ten years.
Net Operating Income, the commercial metric for real estate, needs to be understood. In order to be successful, you will have to make sure that you never dip into the negative.
Make sure you’ll be able to access power, water and other utilities for your commercial property. Your business is sure to have unique utility requirements, but services typically required by most include sewage, water, power, telecommunications and maybe even natural gas.
Advertise the commercial property to both locals and non-locals. Many people only think locals will buy their property, and that’s a mistake. There are many investors who are interested in financing properties which are outside their area as long as they are a great deal.
When viewing multiple properties, be sure to get a checklist from the tour site. After you collect your first proposals from all the property owners, let them all know that you’re looking at other properties before you make your decision. You may want to offhandedly let the owners know that theirs is only one of a few properties in which you are currently interested. Letting this fact slip may even result in your getting a more lucrative deal.
When you are considering making an investment in commercial real estate, know what you need. Write down what features are most important to you when you look a piece of property, like the square footage, the number of offices and conference rooms, and bathrooms.
The commercial space you want to rent may need some changes before you can move in. The changes could be rather cosmetic. Sometimes it is as simple as painting a wall or moving some furniture. In many cases, it may be necessary to move walls or rearrange a floor plan. The contract you negotiate should clearly spell out whether you or your landlord will pay for these changes, or whether the cost will be shared and in what proportions.
Make sure you try to read any disclosures for your agent. Dual agency is a possibility that you need to be aware of. In this case, the real estate agency represents both sides of the transaction. Or, for short, the agent is looking out for both parties’ interests. Dual agency should be disclosed and both parties should agree to it.
The advice outlined above lays out a number of useful strategies applicable to both buying and selling commercial real estate. Be as informed as you can.