You can make large amounts of profit which can leave you wealthy for years to come when it comes to commercial real estate. Of course, the large risks and major investments mean that it is not ideal for everyone.
Check any disclosures a potential real estate agent gives you carefully. Watch for possible dual agency. In this type of transaction, a real estate agency acts on behalf of both parties involved in the deal. In simpler terms, both the landlord and the tenant are simultaneously represented by the agency. Both parties need to clearly understand that the transaction is being handled by a dual agent and consent to this fact.
If you are under a lease for commercial real estate, be wary of standard lease forms. Large real estate companies have been known to hide clauses that are not advantageous to you in their very long, and complicated, leases. By carefully reading the document, you could avoid the pains associated to certain standard commercial leases.
In the beginning, you may find it necessary to spend a great deal of time handling your investment. Finding a good opportunity, going through the transaction and making any necessary repairs to the property takes time. Don’t let the amount time you need to put in during this phase discourage you. It will pay off in the long run.
Be clear about how much square footage is available. A commercial property’s square footage can be measured two different ways. The first way is usable square footage which is the amount of square footage that can be used for business purposes. The other is total square feet which includes all square footage including square footage that cannot be currently used. The best strategy is to ask for both figures, to ask for the square footage and the usable square footage.
Itis customary for the borrower to arrange for the appraisal on a commercial loan. Banks do not allow the appraisal to be used at a later time. Ensure it gets done, and gain peace of mind in the process, by ordering it yourself.
Volatility in interest rates is one of the biggest risks to investors of commercial real estate. Today’s economic climate encourages wild, and sometimes unpredictable, swings in interest rates. This situation leaves investors vulnerable to interest rate hikes. Evaluate all long-term options, and take the interest rate hikes into consideration.
Try to consider feng shui when you are looking to buy commercial properties and for your office at home. Although feng shui isn’t scientifically validated, a couple of its basic tenets, including removing excess clutter and keeping spaces open, have actual practical use that can attract more buyers.
When purchasing commercial real estate, you need to have a tight relationship with private lenders and investors. Make sure you have a big network because there’s a lot of property that goes unnoticed and is sold, you want to increase your chances of making deals by always being informed.
Environmental problems can be an important issue. For example, the previous property owners might not have disposed of hazardous waste appropriately. The fact that you are responsible for causing these issues is irrelevant; a property owner is required to fix them, regardless.
Commercial real estate can indeed be a huge source of profits. Approach this activity as an investment of your money, but also of your time and hard work. If you want to be sure to find success in this, then adhere to the advice given in this article.