Commercial real estate investment has an enticing reward potential, however, a considerable amount of homework is required on the part of any would-be investor. Many people like you have become successful real estate investors by learning and applying the methods discussed in this article, which can help you prosper in this exciting and lucrative field.
There are many factors to consider as you view available properties. For example, you should take note of statistics regarding local employers, workforce availability and the accessibility of skilled labor. Properties located near major employers, like hospitals, schools or distribution centers, are often more in demand at every price range.
Take the time to be certain you are satisfied with a piece of real estate before you purchase it. Don’t jump into any investment without doing your research. If the property isn’t really what you want, you will regret your haste. Realistically, it can take upwards of a year to find the right investment in your local market.
When renting or leasing property, be sure to set up some form of pest control. You should make inquiries regarding pest control procedures, particularly if you plan to lease somewhere that is known for insect or rodent infestations.
When you are picking between commercial properties, think big! If you will be financing the purchase, you should take into account that doing so will require just as much time and effort for a small lot as it will for a larger lot. Generally, this is the same situation as if you were buying something in bulk, the more you buy the cheaper the price of each unit.
Check a commercial property for access to electricity and other utilities; make sure there is good access. Your business may have unique utility needs, but at the very least, you probably require hookups for electric, sewer, water and most likely, gas.
Before negotiating a lease with a commercial tenant, work on narrowing down the list of things that would constitute default. If you are thorough, you are less likely to experience a tenant default. You want to ensure this doesn’t happen at all costs.
Go on a tour of all potential properties. It may be a good idea to take a professional contractor with you when you check out properties you are interested in purchasing. Make preliminary proposals to break the ice and open negotiations. Before making any sort of decision after a counter offer, evaluate it once and then evaluate it again.
Get a site checklist if you are viewing more than one property. Don’t go any further than 1st round proposal responses, unless you let the owners of the property know. Don’t fear telling the owners that you might be interested in other properties. This could help you score a better deal.
Know how to get emergency maintenance performed on a property at a moment’s notice. Talk to the landlord about who does emergency repairs for your building or office. Keep their numbers updated, and know how long it takes them to arrive on average. Consider how an emergency will affect your business operations, and have an emergency operating plan in place.
Commercial properties can afford you some great tax breaks and benefits upon investing in them. Investors may receive interest rate deductions as well as depreciation benefits. However, sometimes an investor can receive taxed income that is not taken as cash, otherwise known as “phantom income”. Before you begin investing, you should be knowledgeable about this particular category of income.
Commercial Real Estate
By using the advice from this article, you have begun the process of becoming knowledgeable in the commercial real estate market. Anyone who knows how to buy and sell commercial real estate can earn a handsome profit. If you experiment with the tips you just read about, you can start making money through real estate investments.