Make sure you have a good idea of what types of commercial property are potentially profitable before you begin to narrow down your search. Making a bad decision at this stage could cost you a lot. Keep reading for a handful of ideas and advice for making more informed commercial real estate decisions.
Prior to making a large investment on a property, look at the local income, unemployment rates, and contraction of the local employers. For example, buying a home near a large employment center, such as a university or hospital, will lead to a higher value and faster sale down the road.
Use your digital camera to take photographs of every room from all angles. Include all the defects in the photo, such as carpet stains, or holes in the walls.
There are many informational websites available that aim to provide new and seasoned real estate investors with the necessary information. You can never know too much about commercial real estate, so keep learning!
Purchasing commercial properties is more time-consuming and complex compared to the purchase of a home. The duration and intensity is necessary if your investment is to yield a high return.
Remember that buying a commercial property and everything that goes along with it can take a lot of time. Finding a good opportunity, going through the transaction and making any necessary repairs to the property takes time. Don’t throw in the towel due to the massive hours needed. You will reap the rewards of all your hard work.
Try to keep your commercial property rentals at full occupancy. Empty commercial properties mean a building that you are having to maintain without any income being received. If you have multiple vacant properties, figure out why this is, so you can understand why your tenants are leaving.
Make sure the property you are interested in has access to utilities. 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.
Do a walk-through of each property on your short list. As you tour each property, you should bring along an experienced contractor who can offer helpful input. Decide on an initial offer and start negotiations. Carefully look over any counteroffers you receive before you make your final choice, whatever that may be.
When you are constructing a letter of intent, make sure that you keep it concise by focusing on larger issues first. Save the smaller issues for future negotiations. This lets you get the bigger issues out of the way first and makes small issues simpler to complete.
Carefully peruse the disclosure statements issued by the real estate agency you intend to hire. Understand the meaning of dual agency. In this situation, the agent will represent the buyer and seller. When dual agency happens the Realtor on behalf of both parties. When it comes to dual agencies, both parties should actually agree to it and it should be disclosed.
If you are just starting out as an investor, you would be well-advised to work on just one investment deal at a time. Pick out a single property type that you would enjoy starting with and only pay attention to it. It is best at first to learn on one strategy than start out with many where you might not fare as well.
Be aware of the potential tax benefits of investing in commercial property. Investors can get interest deductions and depreciation benefits too. “Phantom income” is when an income is taxed but never received as cash, by the investors. Before investing, become more familiar with this sort of income.
As has been outlined in the article above, it is quite achievable to have success with commercial real estate. In the real estate market, things like dedication, technical knowledge and skill will go a long way. Remember that not everyone can be successful, so use the tips you just learned in order to increase your chances of being successful.