Before you invest in a piece of commercial property, carefully survey the market and choose the best kind of property for your needs. If you make the wrong decision, it could become a financial disaster. Keep reading for a handful of ideas and advice for making more informed commercial real estate decisions.
Use your digital camera to take photographs of every room from all angles. Your pictures should portray any damage or defect in the property. Common things you should look for include any cracks or holes in walls, and damages to the carpeting.
Consider online references that contain information written for both real estate novices and veterans. There is no such thing as having too much knowledge, so it is always a good idea to learn as much as you can.
If you are trying to choose between two desirable commercial purchases, the larger one may be the better choice. Finding adequate financing on a piece of property takes time and patience. Think of it like purchasing in bulk; as you buy more, each individual unit costs less.
Learn to set realistic prices by observing the market. Many different factors can influence the real worth of your property.
When having your real estate inspected (as you should), always ask for the qualifications of the inspectors. This is true when working with pest or insect removal, since many people who are non-accredited work in these fields. By hiring an experienced professional, you’re less likely to run into problems after you buy the property.
Check a commercial property for access to electricity and other utilities; make sure there is good access. Your business has its own utility needs, but you are most likely going to need water, sewer, electric and possibly even gas.
Establish what you need before searching in commercial real estate. List all of the features that are necessary for your operations, such as the overall size requirements for your rooms and amount of restrooms required.
Plan on doing some improvements to your new commercial space before you can inhabit it. It could be something simple, such as paining walls, rearranging appliances or furniture or hanging things. Oftentimes, moving walls and other fixtures is required to redistribute the floorplan. Talk to your landlord about these improvements. Try to negotiate a deal where the landlord pays for some, if not all, of the cost of improving your space prior to moving in.
Real estate brokers for commercial properties have different areas of expertise. Agents that work with tenants and landlords both are called full service brokers. There are also agents that only represent tenants. Brokers who work only with tenants have more experience with representing them well.
If you are thinking about hiring any real estate professional, read over all their disclosures. Dual agency is a possibility that you need to be aware of. Dual agency means the real estate company is representing both the seller and the buyer in a property transaction. The real estate agency will represent both the seller and the buyer. Dual agency is something that should always get disclosure, and both parties involved should be in agreement with it.
When you interview a representative of a prospective real estate brokerage, ask how the company attains most of its profits. An honest broker, of course, will be open to discussing how their money was made. You should determine how exactly they derive profits from your business transactions.
Verify that the pro forma and the rent roll match the terms. The pro forma shows the minimum requirements of the lease, while the rent roll shows the total amount of rent collected from each tenant.
Understand that properties won’t just sustain themselves. Don’t make the mistake of overlooking the fact that you will need to put a substantial amount of money into the property to keep it well-maintained. Properties may need expensive repairs. For example, the electrical system may be faulty or out of date, or the roof may require replacement. Every building goes through a phase like this, but some do more than others. Craft a long-term plan for handling repairs and maintenance.
The information you just read proves that success is possible in the real estate market with common sense and hard work. However, your success depends on research, knowledge, expertise, and just a hint of luck. While success is not a guarantee, educating yourself will definitely improve your chances.