Purchasing real estate related to commercial purposes is a lot different from purchasing a home. Keep reading for great advice on how you can achieve your goals in the commercial real estate industry.
Use a digital camera to document the conditions. Be especially diligent in photographing any flaws that exist when you move in, like cracks in the wall or stains on the carpet.
Location is essential to the commercial real estate. For example, consider the surrounding area and local neighborhoods. Don’t forget to check out similar areas as well, in order to see how other neighborhoods are growing economically. This is important, as you don’t want to be in a current growth area only to have the neighborhood stagnate in a few years.
Some factors to consider before making a big investment into real estate are the expanding or contracting of nearby employers, local income levels, and the rate of unemployment. For example, buying a home near a large employment center, such as a university or hospital, will lead to a higher value and faster sale down the road.
If you are purchasing commercial real estate for rental purposes, look for structures that are uncomplicated and sturdily built. You will be able to attract tenants for these properties more quickly due to the fact that they will know the building is well maintained. Since these properties probably do not need many repairs, they will require less maintenance from the owner and tenants.
Make sure you’ll be able to access power, water and other utilities for your commercial property. You will need access to electricity, water, sewer and maybe gas in addition to any unique need that your business has.
Before negotiating a lease with a commercial tenant, work on narrowing down the list of things that would constitute default. That will cut down on the likelihood that the tenant defaults on a lease. This is something you want to avoid.
Bring your digital camera along, and use it. Be especially diligent in photographing any flaws that exist when you move in, like cracks in the wall or stains on the carpet.
Start drafting letters of intent by focusing on the more central issues. Once you have agreement on those, broaden the negotiations to include any smaller issues that remain. This will diffuse tension during negotiations and will facilitate compromise on the minor issues.
You might have to make improvements to your space before you can use it. In some cases, all that is required are simple changes like moving the furniture around or giving the walls a new coat of paint. However, you might have to remove or relocate some of your walls so that you can get the most out of your space. When negotiating, you should discuss who will pay for the improvements you’ll have to make, and should see if the current owner will cover some of your costs.
Commercial Real Estate
If your property deal requires inspections (as it should), look at the inspector’s credentials. You need to be especially diligent when it comes to hiring a pest control service, as many people who work in this field aren’t accredited. This can avoid future problems after the sale.
Now you have learned the basics of commercial real estate investment and a few helpful tips. Use the tips in this article to avoid common commercial real estate scams, and get a great deal on the building out of which you will do business.
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