While purchasing a commercial property is extremely exciting, running and maintaining that property will require a great deal of effort. This probably has you thinking about the best place to start so you can properly manage the property. Trying to figure out everything you need to know about owning commercial property can be difficult, but this article can get you started into acquiring and owning a commercial property.
Bugs and rodents are always looking to ruin your property, so factor pest control into your business strategy when renting commercial property. Look over your rental or lease agreement, and know if you are covered, especially if you live in an area with known infestations.
The location of your commercial property is key to its value and its potential suitability for what you have in mind. Take into consideration the class level of the neighborhood, other commercial properties surrounding it, and accessibility. Also, keep growth in mind. Make sure that the area will still be nice and growing in several years.
It is a far lengthier, and more complicated, process to purchase a commercial property than a residential one. However, all of this is required because it facilitates higher returns on your investments.
When choosing between two different types of commercial properties, it’s best to look at things on a bigger scale. 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 just reflects the general advantage of buying anything in bulk; when you buy a property with more units, you get a lower average price for each one.
When selecting a broker, find out the amount of experience they have with the commercial market. Choose one that specializes in your area of interest. When you find the right broker, make sure your agreement is exclusive.
Even though you may be running a business and ultimately need to secure profits, it’s important that you don’t embellish prices in an attempt to get an extra dollar. A variety of different criteria require consideration in order to increase or decrease your property value.
Try to keep your commercial property rentals at full occupancy. If you have any empty property, then you are responsible for its upkeep and maintenance. If you have lost several tenants or can’t seem to attract them in the first place, there must be a reason. It is your job to figure out the problem and correct it.
Always make sure that utilities can be accessed from the commercial property you are looking into. Every business has unique requirements, but for most, electric, water and sewer access will be required.
The area in which the property is located is important. A business located in a well-to-do neighborhood might be more successful, since the potential customers will be able to spend more. However, if your products or services cater more to those with less funding, consider a location in a neighborhood that fits your potential clientele.
In writing letters of intent, focus on major issues to begin with. Many smaller issues will fall in line on their own with this approach. If not, you can work them out later. This way, negotiations will be smoother, and agreements on the small issues are more likely to be reached.
Real estate brokers for commercial properties have different areas of expertise. Some agents represent tenants only, while brokers work alongside tenants and landlords alike. If you are a tenant, you may be much better off by using a broker who only works with tenants as they have a lot more experience with successful tenant representation.
Look for an agency that keeps your best interest in mind. If you don’t, you might wind up suffering over the long haul for an otherwise preventable error.
Determine the negotiation methods of real estate brokers you are considering. Discuss each potential broker’s experience and relevant education with him before hiring a broker. Also be certain that they are ethical when conducting business, and good at what they do. Request to see examples of previous negotiations, both those that were unsuccessful and those that were successful.
As you know, there’s a lot of work that goes into owning a commercial property. To have a good experience, you’ll need to educate yourself, work hard, and most important, have patience. In fact, you have to keep working at it. Keep the tips in this article in mind, and you’ll have the knowledge you need to find success in commercial real estate.