When you are the owner of some commercial property, it is very fulfilling, but it takes hard work. You might wonder what to do first! It can seem overwhelming and difficult to know what to think about when it comes to commercial real estate, yet in this article, you can learn some insightful information on what you should be doing and learning.
Check any disclosures a potential real estate agent gives you carefully. Understand the meaning of dual agency. Dual agency refers to a situation in which a real estate agent represents both the landlord and the tenant in a commercial transaction. In other words, the agency represents the landlord and the tenant simultaneously. You and the other party should both agree if dual agency is to be okay.
Hire a qualified commercial real estate attorney to avoid legal problems later. If something happens out of the ordinary with your endeavors, you’ll want the best lawyer working on your side.
Pro Forma
This is important because you want to ensure that the terms line up with the pro forma and the rent roll. If these key terms aren’t reviewed by you, you might identify a term left unconsidered by the rent roll, meaning the pro forma gets changed.
It’s likely that the property you buy will need some repairs and work before you move in. The space may be due for some regular maintenance, or it may need something as simple as a new coat of paint. However, in other cases, reconfiguration of the walls will be required. You should pre-negotiate the cost of these alterations with the landlord, and try to get them to contribute towards at least part of them.
If you are considering leasing a property to someone else, then cover all your bases to reduce the risk of a default. Doing so makes it less likely that a tenant can default on the lease. This type of situation is considered very undesirable.
If you have two commercial properties on your short list, you should buy the larger one, if at all possible. Getting the proper financing is going to the same hassle for a retail building with ten outlets as it would be for a retail property with twenty or even thirty units. Just think about it as the more you buy the lower you are paying per unit, so you save more in the end.
You should take numerous, high-quality photographs of the property. Make sure the picture shows the defects (such as spots on the carpet, holes on the wall or discoloration on the sink or bathtub).
Commercial Property
Buying and owning commercial property does require work, effort, and research in order to be able to have a good experience. In fact, you have to keep working at it. If you continue to develop your business sense, and use the tips you just learned, you will own a great commercial property in no time.