Regardless of whether you are new to commercial real estate or already have a significant level of experience, there are always times when the business becomes stressful and overwhelming. The advice of the following article will guide you through the often confusing and complicated world of commercial real estate, and hopefully see you better prepared for succeeding in it.
There are many factors to consider as you view available properties. For example, you should take note of we buy houses statistics regarding local employers, workforce availability and the accessibility of skilled labor. A home that is in a great area, like next to good schools and parks, and has jobs available, will have a higher value than surrounding properties.
Find websites which contain expert information on commercial real estate and use the information to your own advantage. You can never learn too much, so you should study real estate topics regularly.
Location is just as important with commercial real estate as it is with residential properties. Take the neighborhood of the property into consideration. Cross-check similar areas to see how they are growing. You’ll want to choose an area that is on the upswing and will continue growing for at least a decade into the future.
Learn about Net Operating Income, or NOI, a metric in commercial real estate. You need to keep your numbers positive if you are going to be successful.
Create or purchase an inspection checklist before starting to evaluate properties. Tour each potential property, and check how well it meets the requirements on the list. Get the responses from the first round of proposals, but make sure the property owners are aware of this before proceeding. Make sure that the owners are aware that you have other options available. You might score a more reasonable deal that way.
One of the most important things you should be aware of is emergency maintenance. Be sure to find out who takes care of maintenance in the building and also who handles emergency repair situations. Know what the phone numbers are, and know what the response time is for them. Utilize the information given by your landlord to develop a plan for emergencies. This will help you ensure your reputation or customer service is not tarnished while your business is disrupted.
Scrutinize any disclosures made by a real estate agent whom you intend to hire. Some agents work for a dual agency. Dual agency is when a real estate agency is responsible for the representation of both parties involved in a transaction. This will mean that the agency will work with the landlord and tenant simultaneously. You and the other party should both agree if dual agency is to be okay.
To initiate a commercial loan, the prospective borrower must first request an appraisal. Banks will not allow them to be used later. Therefore, to protect yourself and keep your commercial loan on track, order the appraisal yourself.
If you want to invest in a piece of commercial real estate, think about the kind of tax breaks and benefits you might receive. For example, commercial real estate investments garner you deductions for interest on top of your benefits for depreciation. However, investors sometimes receive “phantom income”, which is income that is taxed, but not received as cash. You have to keep all of this in mind before you start to invest in real estate.
Whether you’re a novice or a pro, finding the right piece of commercial real estate can be difficult and nerve-wracking process. The purpose of this article is to reduce the stress of looking for commercial properties and to make this a pleasant experience.