Commercial real estate purchasing differs from purchasing a house. Read on for some tips and suggestions that will help you come out ahead.
Find out how different real estate agents negotiate before you choose one. Ask what kind of training and experience they have. You’ll also want an agent that conducts themselves professionally and ethically, and who has expertise in closing beneficial deals. Ask them to tell you about their past work, including their successes and mistakes.
Don’t try to buy a commercial building until you have financing in place to back up your offer. Speak with friends and some other investors to make a list of the greatest lenders of your area. Do your research and pick the lender who will work best for you, before you even start to look for a property to purchase. If you take time to organize your options now, you can streamline your transaction later on.
Search Engine
Establish an online presence prior to entering the market. Make a website for yourself and make a LinkedIn profile. Make sure that you use search engine optimization on your website so that people can find you easily. The goal is that people can find out who you are by simply punching in your name in a search engine.
Create a real estate newsletter or blog that is regularly updated, and stay active on relevant social networking sites. Stay present online after you complete a deal.
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. You don’t need this to happen.
Find out more about tax benefits before you invest. Investors will receive tax breaks for both interest and depreciation of property. However, sometimes an investor can receive taxed income that is not taken as cash, otherwise known as “phantom income”. It is important to know about this kind of income prior to investing.
Look into the neighborhood you’re planning on buying property in. For example, if you’re offering high-priced goods or services, you might want to purchase property in wealthier areas where people are likely to be able to afford to buy from you. If the business you run caters to a lower-income demographic, buy in an area that fits your clientele best.
It is important that your financial records are up to date when you are looking at purchasing commercial real estate. The lending institution will think you are not very responsible with your money and they may not lend it to you.
Look for properties with several units. More units equals more money in your pocket. A lot of people who invest in real estate do not even give consideration to properties that contain fewer than ten units. It is generally accepted that a higher number of units correlates to higher profits.
Make sure you have enough cash flow available for you from family, friends and any professional lenders accessible to you. Contracts should be devised that either provide you with a fixed rate of interest on the loan repayment, or provide them with a percentage of what you make from the property.
Be careful to choose commercial properties that are solidly and simply constructed if you plan to use them as rental properties. Tenants will be interested by buildings that look well-cared for. Because these properties are in great condition, the property owners and the occupants will have a simpler time with basic maintenance service.
Understand exactly what you want for your business prior to searching for commercial properties. You should have a good idea of the kind of space you will need. If you have hopes of company growth, you will clearly want to purchase excess space, rather than wait until later when prices go up.
Now you have learned the basics of commercial real estate investment and a few helpful tips. Keep the strategies in this guide in mind to help you get a good deal that will fit your needs in selecting the building you need for your business.