Note that commercial and industrial properties are always going on the market, yet you want to understand that these type of properties don’t get preferential listings as regular homes would. This market requires a different set of skills in order to be successful, and with the following tips, you will be able to navigate it properly.
Whether you are buying or selling, don’t shy away from negotiation. See to it that your concerns are heard and all you want is a fair price when it comes to the property.
Use a digital camera to document the conditions. Make certain that the pictures show irregularities, such as holes or bad paint on walls, carpet stains, and bathtub or sink discoloration.
If you are renting or leasing, pest control is important to look at. Especially when you rent in an area known to be infested by bugs or rodents, ask your rental agent about pest control policies.
If you are selecting a broker, ascertain the amount of experience they have had within the commercial real estate market. Make sure that they are experts in the area in which you are selling or buying. Then if they meet the criteria you are looking for, you can agree to work with that broker exclusively.
If inspections are included in your real estate transaction, as they usually are, make a request to see the inspectors’ credentials. This guideline is especially important when working with people who deal in pest management; these specific fields are often populated by practitioners who lack proper credentials. Reviewing credentials will help you prevent major issues after you make the purchase.
If you want to rent your commercial property, well built solid buildings are your best bet. Because it is apparent that these types of structures have been kept in good condition, it greatly increases the chances that tenants will be quick to rent the space. Not are the buildings more sturdy, there will be less maintenance issues for the owner and the tenant.
Before you negotiate a commercial real estate lease, you should aim to decrease the things that could be considered an event of default as much as you possibly can. This will decrease the probability of the tenant defaulting on the lease. You, of course, would not desire this to occur.
Have property professionally inspected before you decide to put it up for sale. If the inspector finds any problems, you should attend to them promptly.
When you are composing a letter of intent, you should emphasize simplicity by negotiating on the bigger issues first, then addressing the minor issues later in the negotiations. The negotiations will become less tense and you will be able to better get an agreement on the more small problems.
If you are checking out more than one property, draw up a checklist to compare the features of the different properties. Collect responses from everyone that offers one, but inform the property owners before you do anything else. Do not be shy about mentioning that you’re also looking at other properties that day. It might lead to a better deal.
Be aware of the potential tax benefits of investing in commercial property. For example, commercial real estate investments garner you deductions for interest on top of your benefits for depreciation. However, investors sometimes receive “phantom income”, which is income that is taxed, but not received as cash. It is important to know about this kind of income prior to investing.
Find out how different real estate agents negotiate before you choose one. Ask what kind of training and experience they have. You also want to know they are ethical in their approach to finding the best deals. Have them provide you with examples of negotiations they’ve engaged in previously, both good and bad.
If you want to know if a real estate broker is honest, ask him where he makes the majority of his money. They must be able to talk to you about this question openly, as they make it clear that their interest is different from yours. You need to know if their money-making priorities are going to trump your real estate needs.
Be mindful of the fact that all pieces of property have specific lifetimes. Ignorance may be bliss at first, but avoiding this fact could mean you lose a lot of money toward property upkeep, wiping out any savings you might have gotten from the initial purchase. For example, the property may require an entirely new electrical system, a new roof or a new central heating unit. Any building has phases like this, although some do so more frequently than others. It is important to formulate a long-term approach for managing these types of repairs.
Finding the proper commercial property is just half the battle. Just a little knowledge will go a long way in helping you seal the best deal in commercial real estate.