Commercial property is a very exciting endeavor, however, it takes a ton of work. It can be quite intimidating, and leave you wondering how to even start organizing the things that have to be accounted for. 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.
Get a site checklist if you are viewing more than one property. Get the responses from the first round of proposals, but make sure the property owners are aware of this before proceeding. Don’t be afraid to casually tell the owners that you are looking at other properties, too. The information may help you to negotiate more favorable terms on your deal.
Buying commercial real estate is much more complicated and time-consuming than buying a home. Yet the greater the risk and time, the greater the profit, so take this into consideration when you think about the type of investments you want to make in the future.
When you are looking for a building for your business, size is very important. Invest in property which allows your business to grow as necessary so you can avoid having to buy another property down the road.
Once you have narrowed your choices down to two major contenders, you should expand your decision to include the big picture. It’s just as difficult to obtain adequate financing for a 10 unit apartment complex as it is for a 20 unit building. The concept here is the same as any other situation where you are purchasing multiple things. The more you purchase, the less you will pay for each unit.
Have family, friends, and professional lenders partner with you to make sure you have enough cash to buy commercial real estate. When you set up contracts with these partners, aim either to have a fixed rate of interest for your repayment or to simply make them co-owners of a certain percentage of the property.
Get the credentials of any person who will be doing an inspection on a property you are trying to buy. There are many non-accredited people who work in such fields as insect removal. This can avoid future problems after the sale.
Before paying any agent, check his or her disclosures; these can tell you a great deal about the agent’s character and ability. Understand the meaning of dual agency. This means the same agent will be representing the two parties. Dual agency occurs when the landlord and the tenant hire the same agent. An agent should always disclose dual agency, and it must be acceptable to both parties.
You need to figure in the possibility of inflation when investing in real estate. Many past leases included clauses that allowed for CPI based adjustments, which protect signers from inflationary damage per what happens to Consumer Price Index data. This particular practice is practically extinct today, leaving you at far more risk of losing money, thanks to inflation.
You know now that finding, purchasing and owning a commercial property is a journey filled with doing your homework and spending your time in order to maximize your returns. It also takes perseverance in the face of adversity. Applying the useful advice of this article, you should be well prepared for a successful endeavor in commercial real estate.