It has been a long hard road, but you are now the proud owner of a commercial property. By now, you certainly have decided what or who will be using the piece of real estate students
estate. Go ahead, celebrate. Celebrate the fact that you have accomplished a major goal.
An important thing to consider when you purchase commercial real estate is the commercial properties
neighboring you. For example, if the properties near you have booming successful business you may get business by simply being next door and having a lot of customer traffic in the area. Also you could get business just from the euphoria of happy customers from the other businesses.
Keep in mind that you are buying something to make money out of it, not simply to own it. When looking at apartment
buildings, think about how much people would be willing to rent these apartments for. You can also make money by re-selling your property after a few years, but this is not the main goal of commercial real estate.
Commercial real estate can be a great long term investment. When looking for a property that you can rent out as apartments, look into properties that have at least ten or more units, in order to maximize your profits. The more units that a property has, the cheaper each individual unit is.
If you are a first time commercial real estate buyer, you may want to give a newly licensed commercial real estate broker, attorney or lender a try. Pass them over for more experienced people in the field. Working with those already experienced in the field will give you more confidence in purchasing commercial real estate.
Take your time screening deals and making offers, especially in the beginning. Beginners often want to rush through the process of purchasing their first investment property. But doing so can lead to big mistakes, on both the buying and selling end. Take your time and understand that there is a learning curve. The longer you're in this business the quicker the process will become.
On average, it will take about a week, maybe longer for review of the legal documents for the sale. Be sure to keep this in mind when you are planning any kind of projects for that property. It will take much longer for a commercial sale to be completed than what it would a residential real estate sale.
Both local and non-local advertising of your commercial real estate property will be beneficial to you. A lot of sellers fall into the misconception that only the local buyers are interested parties in potential purchase. There are many investors who are interested in financing properties which are outside their area as long as they are a great deal.
If you will be including utilities in your tenant's rent, be sure to know the cost of those utilities before setting the rental amount. It can sometimes be easy to under estimate the cost of heat in the winter or air conditioning in the summer. Water bills can also vary by area. Having an accurate picture of utilities can keep you from under pricing your property.
If investing in commercial properties, always be aware that there are many other properties available. You should never allow yourself to feel pressured into a sale because you feel it is a last-resort. Other properties always go up for sale, so keep away from becoming emotionally involved with your sales.
Some apartments come with a garage. Measure it before you rent the apartment to make sure your oversized SUVs or pick up trucks fit inside. You may have only one additional parking space besides your garage and there will be no room to park your extra long vehicle. Make the necessary arrangements with the management before you rent as it might be impossible to remedy the situation later.
Make sure you have the money if you are going to invest in commercial real estate
. You will need enough to cover a down payment, closing costs, points and earnest money. Banks might be more apt to give you the loan you need, if you are taking care of some of the costs already.
Always keep tenants, otherwise, your commercial property will end up costing you money instead of making you money. You are responsible for the expenses associated with keeping your unoccupied spaces updated and maintained. Figure out why you have spaces that are consistently open. In some cases, you might need to do some problem-solving so that tenants will want to rent these spaces.
Some say that it's a terrible time to purchase real estate, while others insist that there has never been a better time to invest your money. Don't believe the hype on either end. It's just not worth it. Make sure you read this article and the tips within, to understand how you can make an informed decision as a buyer.
You should always consult an expert if you are interested in buying large amounts of real estate. There are many people out there that try to make plans to do large real estate
deals alone and they inevitably fail. Have someone in your corner that knows what they are doing.