Buying commercial real estate can be very different from buying your home. Read this article for timely tips and advice to help drive you to success.
Don’t make any big real estate purchases until you’ve evaluated the unemployment rates, income levels, and expansion rates of the area. Properties near hospitals, universities or other centers of large numbers of employees tend to sell faster and at higher-than-average values.
Consider online references that contain information written for both real estate novices and veterans. It is wise to learn all you can, as it is impossible to know too much.
Purchasing commercial real estate is a much more lengthy and complicated process than that of buying a home. You need to understand, you have to be diligent in order to get a profit.
Research your prospective brokers to see how experienced they are with the commercial market. Make certain that they have experience and expertise in the community you are dealing in. Once you’ve determined the broker is right for your needs, make sure any agreement into which you enter is an exclusive one.
Make sure that you know and understand what “NOI” (Net Operating Income) is. Staying in the positive is what you need to do to succeed.
If you intend on putting your commercial property on the rental market, find a simple, but solidly constructed building. These types of buildings attract tenants more quickly than other buildings, as prospective tenants know that the building is less likely to have maintenance issues. Maintenance is also easier, because these buildings require less repair.
You should acquire tour site checklists when you’re examining several properties. Don’t go any further than 1st round proposal responses, unless you let the owners of the property know. You may want to offhandedly let the owners know that theirs is only one of a few properties in which you are currently interested. You may even get a more favorable deal!
Establish your goals and needs before you start looking at properties. You should write a list of which features are most important to you. For example, do you need a specific number of restrooms, a specific amount of square footage, or a conference room?
Full Service Broker
Know that there are many different kinds of brokers when it comes to commercial real estate. Some agents will represent only the tenant while a full service broker will represent both parties. A tenant’s-only broker may serve your needs better than a full service broker.
Make sure you try to read any disclosures for your agent. Look for any disclosures regarding dual agency. In this type of transaction, a real estate agency acts on behalf of both parties involved in the deal. Dual agency occurs when the landlord and the tenant hire the same agent. If dual agency is the case, it should be out in the open and both the landlord and the tenant should be in agreement with the arrangement.
Buying a piece of commercial property presents many challenges. Be sure to follow the advice of this article to get your best deal in commercial real estate, and continue on a successful path.