In fact, commercial real estate often has a higher potential for profit than residential properties. Finding the right opportunity is not easy. Therefore, the following tips will make it easier for you to get good deals in commercial real estate.
When entering the commercial real estate market, patience is perhaps your best ally. Don’t enter into any investment opportunity without doing the proper amount of research. You’ll regret it quickly if your lack of research results in a property without much re-sale value. It may take more than a year to get the right investment in the real estate market.
An essential fundamental of commercial property is location, location, location. Think about the type of neighborhood the property is in. Compare its growth to similar areas. You need to be reasonably certain that the area will still be decent and growing 10 years from now.
When you are picking between commercial properties, think big! Regardless of which way you choose, coming up with the capital is a common factor, so often times it will be be worth digging a little bit deeper to get the larger property in order to maximize your long-term profits. This works in the same way as buying bulk items from Costco. You buy large numbers of items to pay less per item.
Make sure that the broker you decide to work with has experience in the commercial market. Make sure they are specializing in the desired area that you’re selling or buying in. You need to get into a type of exclusive agreement with your broker.
When you are shopping for a commercial property, be sure to confirm that you will have access to utilities. Your particular business might need additional services, such as cable, but at the minimum there should probably be sewer, water, phone, electric and gas.
If you are thinking of selling a commercial property, your experience will be much smoother if you utilize the services of a professional and have it properly inspected. Fix all problems that they find as soon as possible.
You should advertise your commercial property as being for sale to people locally and those who are not local. Many sellers mistakenly presume that their property will appeal only to local buyers. There are many private investors who prefer to purchase reasonably-priced real estate that is not local to where they reside.
Write an easy-to-understand letter of intent, focusing on the biggest issues. You can worry about the little things later on. The negotiations will go much better and be less stressful if you keep the small stuff out of the way and can focus on the larger issues first.
If you are hunting among multiple properties, make a checklist for touring sites. Whilst you can take the first proposal responses, make sure that you don’t go any further without first informing the property owners of your plans. Do not be afraid to let it slip to the owners that there are other properties that you are considering. This may ensure that you get a much more viable deal.
Now you should be aware of all the fundamentals involved with investing in commercial real estate. Remain flexible and alert as you peruse commercial real estate opportunities. By doing so, you will be in a position to recognize the good opportunities that others might miss, and make a deal that maximizes your profitability.