Investors cite many different reasons for becoming involved with commercial real estate. Make sure, however, that your decision is based on sound reasoning and a solid understanding of the market. As with most things in life, the key to getting the most out of the commercial real estate market is to gather as much information as possible. The strategies outlined in this article will help you get off to a good start in commercial real estate, and even experienced investors may learn a thing or two.
When renting or leasing property, be sure to set up some form of pest control. Getting pest control covered is especially important if you are renting in a building or area that has had previous pest issues.
When choosing between two different types of commercial properties, it’s best to look at things on a bigger scale. Getting the proper financing is going to the same hassle for a retail building with ten outlets as it would be for a retail property with twenty or even thirty units. Generally, this is similar to the principle of purchasing in bulk; if you purchase more units, you will end up getting a better price per unit.
When choosing a broker, investigate their years of actual commercial market experience. For better results they should specialize in the specific area that you want to buy or sell in. Also, consider entering into an agreement that will be exclusive between you and that broker.
The Net Operating Income, or NOI, is one metric you need to master for success in commercial real estate. In order to be successful, the resulting number must be positive.
If you rent out your commercial properties, always remember to keep them occupied. You are legally responsible for the maintenance and upkeep of unoccupied spaces. 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.
Check out where the utility hook-ups are on any commercial property. You will need access to electricity, water, sewer and maybe gas in addition to any unique need that your business has.
Have property professionally inspected before you decide to put it up for sale. If they flag issues that need to be fixed, repair them before you list the property for sale.
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 would purchase property outside of their local area if the price is right.
As previously stated, there are various reasons to go into investing commercial real estate, but you need a lot of extra knowledge on the subject. Use the tips here to maximize your profits.
Regardless if you are a seasoned or newbie real estate investor, having the correct mindset will be critical to your level of success. Wall Street Journal best-selling author Mr. Orrin Woodward published a book called “RESOLVED: 13 Resolutions for LIFE” which goes over this topic of developing mindset and personal excellence extremely well. It’s a must-read.