Commercial real estate transactions have many unique characteristics. Read the following paragraphs for a few insights that you can use to do better.
Regardless of whether or not you are the seller or the buyer, negotiate! Let people know what you want and make sure you are asking for a realistic price.
Use of a digital camera is a simple and effective strategy. Each photograph should clearly depict the point of contention, whether that happens to be a stain, hole or other problem.
Make sure you always remain cool, calm, and collected when you begin to look for commercial real estate. Do not make impulsive decisions. You might find out that the property is not what you needed after all. Be patient, as it could take as long as a year for just the right investment property to turn up.
Commercial transactions are significantly more time-consuming, complex and involved than the home-buying process. Understand, however, that the intensity and duration of the process is necessary to achieve the higher return on your investment.
If you are trying to choose between two good commercial properties, think big. Acquiring enough money to finance a 10 or 20 unit apartment complex can be huge undertaking. This just reflects the general advantage of buying anything in bulk; when you buy a property with more units, you get a lower average price for each one.
If your property deal requires inspections (as it should), look at the inspector’s credentials. You need to be especially diligent when it comes to hiring a pest control service, as many people who work in this field aren’t accredited. A non-accredited inspector could be a source of problems.
If you are negotiating a commercial lease, make sure nothing can be considered as events of default. If you are thorough, you are less likely to experience a tenant default. Once a default happens, you’ll be in big trouble!
Advertise your property for sale locally and outside your region. Don’t be mistaken by the thought that locals will be the only people interested in your sale. Many investors will consider purchasing a property outside their own region if the price is right.
In writing letters of intent, focus on major issues to begin with. Many smaller issues will fall in line on their own with this approach. If not, you can work them out later. This make negotiations less contentious, as coming to agreement on minor issues is naturally easier than agreeing on the big stuff.
If there is more then one property you are considering, acquire the house survey checklist for each one during your site tour. Don’t go any further than 1st round proposal responses, unless you let the owners of the property know. Make sure that the owners are aware that you have other options available. You might walk away with more money in your pocket.
Establish your goals and needs before you start looking at properties. 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.
If the agent you are thinking of hiring for your commercial real estate transaction gives you any disclosure forms, make sure you read them carefully. Try to beware of dual agency. With a dual agency, you have the real estate broker working on each side of the transaction. This will mean that the agency will work with the landlord and tenant simultaneously. Whenever dual agency is part of a transaction, it must be disclosed to both parties of the transaction. Both sides must also agree to the dual agency.
If you are new to investing, focus on one investment type at a time. Decide on one property type and educate yourself about the best way to handle it. It is far better to dominate one area of the commercial real estate market than to spread your investing order many different types of commercial buildings.
Take the time to find a good agency who actively believes and demonstrates that the client comes first. Bad customer service can cost you a fortune when dealing with commercial property, so do your homework.
To make sure you are working with the right real estate broker, ask what they consider as a success or a failure. Ask how they have measured their results in the past, and have them give you examples. Be certain you have a clear understandings of the strategies the broker uses. Only work with them if you feel you are a good match, and have a similar philosophy about the strategies they use.
When shopping for an honest brokerage, ask the representative how the company makes money. The firm should answer your questions directly and let you know that what is best for them, might not be best for you. Be certain you know exactly what specific benefit they will draw from taking care of this transaction for you.
Always ensure that the areas around your property are well taken care of. If there are problems with environmental waste, remember that you will be responsible for any necessary cleanup. You should also consider weather conditions in the geographical area where your building is located. If the area floods every year or is prone to hurricanes, tornadoes or earthquakes, you might have expensive repairs to make to your building on a regular basis. If so, think again. If you need information about potential environmental problems in an area, contact local environmental protection or assessment agencies.
Commercial Real Estate
As shown in this article, there are many different factors involved in purchasing commercial real estate properties. Be sure to follow the advice of this article to get your best deal in commercial real estate, and continue on a successful path.