Commercial properties are listed often, but you won’t see them in preferential listing like the residential listing for homes. You need to know how to navigate the often complex market. Start by reading this article.
Try practicing patience and remain calm, if you are considering purchasing any commercial real estate. Never rush into a particular investment. If the property isn’t really what you want, you will regret your haste. Some investors have to wait for a year or so before they find the right opportunity.
When making decisions between one commercial property and another, think big. It’s just as difficult to obtain adequate financing for a 10 unit apartment complex as it is for a 20 unit building. Generally, this is the same situation as if you were buying something in bulk, the more you buy the cheaper the price of each unit.
Ensure that the amount of money you want for your commercial property makes sense, given local market conditions. Most appraisers can’t take all factors into account because there are an infinite number of variables involved in determining the value of a piece of property. These variables can all make your property worth less than the appraisal claims it is worth.
Be certain the commercial property you are considering has good utilities access. You will need access to electricity, water, sewer and maybe gas in addition to any unique need that your business has.
Advertise your commercial real estate far and wide. Many sellers mistakenly assume that their property is only interesting to local buyers. There are many private investors who buy property outside of their area if the price is affordable.
Do a walk-through of each property on your short list. Even better, have someone who knows commercial real estate tour the properties with you. Use what you see in these tours to determine a fair opening offer. Take your time and really explore your offers before you decide to buy or pass.
You might need to reconfigure the interior of your property before you can use it properly. The changes could be rather cosmetic. Sometimes it is as simple as painting a wall or moving some furniture. However, many people find they need to take out or add walls to make modifications to the basic floor plan. Get an agreement ahead of time about who will be financially responsible for these improvements, or at least try to have the landlord responsible for part of the cost.
Emergency maintenance should always be on your need to know list. Get a list of emergency maintenance contacts from your landlord. It is important to keep these contact phone numbers handy and to have a good understanding of how long it will take for them to respond if needed. Use the information from your landlord to prepare an emergency plan to protect your reputation and customer service for the times when your normal business flow is disrupted.
When you are pursuing an investment in commercial real estate, finding the right type is only the start of the process. A little bit of education can help you to be better prepared.
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