Commercial real estate is a very difficult, time-consuming investment. The financial rewards of investing often eclipse the expenditures in time and money. Mindful application of the advice in this article will ensure you success.
Examine socioeconomic conditions in the neighborhood you’re thinking of purchasing commercial real estate in. Pay special attention to the unemployment rate, and the average income level in your property’s neighborhood. Your house will sell more quickly and at a higher value if it is near a university, hospital or any large employment center.
Dual Agency
When hiring a real estate agent, read the disclosures completely before signing a contract with a realtor. Watch for possible dual agency. Dual agency in real estate is when the agency works for both parties. In other words, the agent is representing both you and your landlord in the same transaction. Dual agency should be disclosed and both parties should agree to it.
Buy a bigger building when thinking about making a commercial real estate investment. If you are considering purchasing a building with 5 apartments, understand that you could manage one with 50 apartments just as easily. You’ll have to take out the same loan regardless of the number of units in the building, so buying a bigger building makes good financial sense. The larger the building, the less the cost per unit. For example, if you have to take out a $50,000 loan, you’re paying $5,000 per unit if there are only 10 units in the building. If there are 100 units in the building, however, you’ll only pay $500 per unit.
In the beginning, a great deal of time might be required to spend on your investment. First you have to hunt down a good deal, and then, after your purchase, you may be required to complete some repair work or remodeling. Do not let the lengthy nature of the process discourage you. Stick with it and you’ll be rewarded.
Before you choose your real estate broker, find out how they negotiate. Ask how they were trained and how much experience they have. Look for a broker who always adopt an ethical approach, has values and know where to get good deals. Ask them to tell you about their past work, including their successes and mistakes.
Commercial Real Estate
As you have seen, commercial real estate can be a very lucrative investment. Use the advice you have learned here so you can give yourself the best chance of success in commercial real estate.