So, after much deliberation, you have decided that you want to enter the commercial real estate market? You may not be sure how to begin or may have questions about the process. Here is some advice to get you on your way in commercial real estate.
Before you buy or sell a commercial property, find out several key economic indicators for the region, including trends in unemployment and income, as well as major employers in the region. Properties that are near major employment centers, such as medical centers or universities, often sell more quickly and at a higher price.
It is important to learn and understand a metric used in commercial real estate investment called NOI or Net Operating Income. To maximize your success, keep your numbers in the positive values.
You deal should naturally include inspections, and you should also evaluate the credentials of the inspectors. Many people in certain fields are not accredited, including pest and insect removal services. This will avoid bigger problems in the post-sale.
If you are purchasing commercial real estate for rental purposes, look for structures that are uncomplicated and sturdily built. These properties are generally top sellers because prospective tenants can see how well-built and maintained they are. These types of buildings are easier to fix for everyone and they might not need as many fixes.
Make sure you’ll be able to access power, water and other utilities for your commercial property. Every business requires certain utilities, most commonly things like water, sewage and electricity.
Ensure that you have reviewed your contracts before negotiating leases so that you minimize the chances of default. That will cut down on the likelihood that the tenant defaults on a lease. This is something you want to avoid.
When selling commercial property, advertise locally and outside of your region. Many people target their advertising to local buyers only, thinking that those buyers are their market. There are many private investors who prefer to purchase reasonably-priced real estate that is not local to where they reside.
Before you begin searching the market for a new property, outline what you need. You should list the most important things that you are looking for, such as space, restrooms, conference rooms, etc.
Real Estate
Before hiring any real estate broker, read all of his disclosures. It is important that you realize that you may be entering a dual agency transaction. Dual agency means the real estate company is representing both the seller and the buyer in a property transaction. The real estate agency will represent both the seller and the buyer. When it comes to dual agencies, both parties should actually agree to it and it should be disclosed.
At this point, you should be prepared for an investment in commercial property. You may have thought you were already well-prepared, but you can never have enough information, when it comes to investing your hard-earned money. Armed with this new information, hopefully you are ready to go out and start a successful journey in the commercial real estate market.
There are tremendous opportunities for small businesses and social entrepreneurs to support their communities through community foundations, donor advised funds and other means of giving back. Find the neighborhoods in Santa Clara County where you can make the most impact on civic engagement in the community.