Even though there are many commercial properties listed every day, you will not see them in the preferential listings, as you would homes. You need to know how to search to find commercial properties, and this article can provide you with the best way to do this.
Consider visiting websites that contain a wealth of information beneficial to new and seasoned commercial real estate investors alike. You can’t be too informed about the subject, so try to always be seeking out new sources of knowledge.
If you are in a situation where you have to choose between two attractive commercial properties, remember that size matters. Whether it be a twenty or ten unit apartment complex, you want to get adequate financing to back you up. Generally, this is similar to the principle of purchasing in bulk; if you purchase more units, you will end up getting a better price per unit.
When choosing brokers with whom to work, find out the amount of experience they have dealing with commercial properties. Make certain that they have experience and expertise in the community you are dealing in. Then if they meet the criteria you are looking for, you can agree to work with that broker exclusively.
Make sure that you know and understand what “NOI” (Net Operating Income) is. For the investment to be profitable, it has to produce more income than operating expenses.
If you desire to rent out commercial real estate, then you need to find solidly yet simply constructed buildings. A well-built building will attract tenants quickly because tenants want a property that is solid. These buildings also provide much easier maintenance for both the tenants and the owner, as they are less likely to require repairs.
If you rent commercial property, do what you can to keep occupancy high. If there is still open space, it will be incumbent upon you to pay for maintenance. If you have multiple vacant properties, figure out why this is, so you can understand why your tenants are leaving.
Check out where the utility hook-ups are on any commercial property. Every business’ needs are different, but at a minimum, most businesses will need power, sewer and water services.
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. The initial negotiations will be less tense and the smaller issues will seem less important later.
Know what your specific needs are prior to starting your commercial real estate hunt. Think of any property features that are high priorities for you and list them down, like the number of restrooms and office, conference room availability and overall square footage.
The new space you purchase might need some upgrades and repairs prior to occupation. For example, you might neat to repaint or purchase new furniture. The renovation project can get larger and could consist of knocking down, moving or building walls to make the floor plan usable. Be sure to negotiate who is responsible for these changes ahead of time so that you do not have to pay for the full cost.
It is important to know how to deal with emergency maintenance. Talk to the landlord about who does emergency repairs for your building or office. Keep the phone numbers in a convenient place, and know how long it will take them to respond if needed. Create an emergency plan using your landlord’s information so that you can protect customer service and your reputation in case of a disruption to your usual business.
If you are new to commercial real estate investing, you should learn how to manage one investment type at a time. Select one type of property that appeals to you, and devote your undivided attention to it. It’s good to find a niche and do very, very well at it rather than flitting from one investment type to another without much success.
Don’t feel scared to investigate your broker’s personality! For example, ask them what they consider to be success, and what constitutes failure. Learn their methods of measuring their results. Look for online ratings or complaints. Only work with them if you feel you are a good match, and have a similar philosophy about the strategies they use.
Determine the negotiation methods of real estate brokers you are considering. Inquire into their specific credentials and training; do not be afraid to ask for references. You also want to check into the methods they use and make sure they are ethical when doing business. Go ahead and ask them for examples of any past negotiations, including those that were successful and those that were failures.
Check out the state of the environment around your property. It’s up to you to clean up any damage or environmental waste associated with your property. Are you aware of whether or not the property is located on a flood plain? Think long and hard before continuing on that path. You can speak to environmental assessment places to get information about that area you want to buy in.
Finding just the right commercial real estate property is the first half of the endeavor. The right information can get you far.