Selling or buying commercial real estate is a very rigorous process. Even if you are experienced, you might find out about something new or improve your understanding of something you thought you were familiar with. The following tips and techniques will help you understand all of the aspects of commercial properties.
You should take digital photos of the condition. Make sure the picture shows the defects (such as spots on the carpet, holes on the wall or discoloration on the sink or bathtub).
If you are looking to lease or rent, the issue of pest control is a critical one to address. If the area that you are renting in is known for pest infestations, it is especially important for you to talk to your rental agency about their policies for pest control.
Regardless of whether or not you are the seller or the buyer, negotiate! Make certain that your voice is heard, and do what it takes to find a fair property price.
Location is a very important part of commercial real estate. You will want to consider many things, including the neighborhood that the property is located in. Compare its growth to similar areas. What you are seeing now in terms of commercial potential might be very different a few years from now.
When starting out in commercial real estate, it is important you understand the measurement labeled Net Operating Income, or NOI for short. To be a success, you need to be able to stay on the positive number side.
If you desire to rent out commercial real estate, then you need to find solidly yet simply constructed buildings. Tenants are more likely to move in when they know the property is well taken care of. These properties are also more cost effective for you and your tenants due to the fact that they only require minimal upkeep and repairs.
If you have to choose between two different properties, consider the benefits of opting for the larger amount of space. Getting the proper financing is going to the same hassle for a retail building with ten outlets as it would be for a retail property with twenty or even thirty units. This is generally like buying something in bulk, the more you buy, the less it is is per unit.
Check out where the utility hook-ups are on any commercial property. Every business requires certain utilities, most commonly things like water, sewage and electricity.
Ensure that you have reviewed your contracts before negotiating leases so that you minimize the chances of default. This decreases the chances that the tenant will default on the lease. You want to ensure this doesn’t happen at all costs.
Before you begin your search for the perfect commercial property, have a clear picture of your needs. Make a list of the property features most important for you, such as square footage, number of offices, conference rooms, and restrooms.
Look at the surrounding neighborhood before you decide on purchasing a specific commercial property. Purchasing in an affluent area may help your business to be more successful, since the potential clients may have deeper pockets. However, if you’re offering services that less wealthy people may be more interested in, you probably want to purchase property in a less wealthy area.
You may have to make some repairs or improvements to your property before you can move in. These changes could simply be cosmetic ones as simple as a new coat of paint or moving the furniture around. Oftentimes, moving walls and other fixtures is required to redistribute the floorplan. Negotiate payment for these improvements ahead of time, and attempt to have the landlord pay at least part of the costs.
Commercial real estate agents come in different types. Some brokers represent tenants only, while full service brokers will work with landlords and tenants. If you hire a broker that only deals with tenants you may be better off, they are more experienced.
Regarding commercial loans, it is the borrower’s responsibility to obtain an appraisal. The bank will not allow you to use it later. Spare yourself further hassle by initiating the request yourself.
Before making a commitment, you should request tours of any potential properties. Even better, have someone who knows commercial real estate tour the properties with you. Once that is done, you can submit your proposal and begin negotiations. Carefully look over any counteroffers you receive before you make your final choice, whatever that may be.
Of course, it is never wise to assume you have enough information about any important financial matter, and this includes commercial real estate dealings. There is always more to learn and information is always evolving when it comes to real estate. Implement your knowledge effectively to boost your success!
“Protecting YOU Is My Passion”
– Andrew John Cocks
Real Estate Broker
PS: Have you seen these Muskoka Real Estate Listings?