Owning commercial property can be an exciting endeavour, but it does require a lot of effort to take care of. This can leave you wondering where to even begin to get things taken care of. This article is for all you commercial property tycoons out there, and it is packed full of tips that will help to get you started in the commercial property market.
Examine socioeconomic conditions in the neighbourhood you’re thinking of purchasing commercial property in. Pay special attention to the unemployment rate, and the average income level in your property’s neighbourhood. If the building is near certain specific buildings, including hospitals, universities, or large companies, you might be able to sell it faster and for more money.
Use of a digital camera is a simple and effective strategy. Make certain your photos highlight specific defects such as carpet spots, wall holes and bathroom discolorations.
Consider online references that contain information written for both property novices and veterans. Learning is an ongoing process, and you can never know enough.
Location, location, location is important to consider. Find out more about the neighbourhood. Compare this neighbourhood to the growth of other similar areas. This is important, as you don’t want to be in a current growth area only to have the neighbourhood stagnate in a few years.
Commercial property is more time consuming, confusing and involves more than just buying a home. Although commercial property purchases take longer you will normally receive a higher return on the investment.
When you are picking between commercial properties, think big! Regardless of whether the property you decide on has twenty units or fifty, the process of obtaining financing will be the same, and in both cases will require substantial effort. Generally, it’s like buying in bulk; the more you buy, the less each unit is.
You deal should naturally include inspections, and you should also evaluate the credentials of the inspectors. You need to be especially diligent when it comes to hiring a pest control service, as many people who work in this field aren’t accredited. This will avoid bigger problems in the post-sale.
Before you negotiate a commercial property lease, you should aim to decrease the things that could be considered an event of default as much as you possibly can. If you are able to successfully do this, you’ll find that your probability of having the tenant within the building defaulting will be low. You do not want this to happen to you.
Make a checklist to compare details when looking at several properties. Accept responses to the initial proposals, but don’t go further than that unless you inform the property owners. Don’t hesitate to let it be known that you are entertaining other options. It could help you get a better deal.
Assess what you need before you look for commercial properties. List the qualities that concern you most in a property (e.g. restroom facilities, conference facilities, number of units available, square footage, etc.)
Commercial property agents specialise in working with different types of clients. Agents that work with tenants and landlords both are called full service brokers. There are also agents that only represent tenants. You may benefit significantly better from hiring the services of a broker working with tenants exclusively, as he has significantly more experience representing tenants successfully.
Borrowers are required to order the appraisal in commercial loans. Banks will not allow them to be used later. Make sure you have all your paperwork in order before you even apply for your loan.
You should consult with a tax expert prior to purchasing anything. They’ll be able to discuss the long-term cost of the building, and what the tax rate for owning the building will be. Work with your adviser to find an area where taxes will not be as high.
As you know, there’s a lot of work that goes into owning a commercial property. To have a good experience, you’ll need to educate yourself, work hard, and most important, have patience. You also have to stay motivated, and keep working hard. If you truly want that most desirable location, keep the pointers from this article in mind, and never give up your search.