22 Aug 2017, 05:52

Commercial Real Estate Investing : general guidelines

NewHome321.com

Agent/Owner user

21 Posts

the : 13/11/2013

Simple Tips About Commercial Real Estate Investing

 

Buying commercial properties can be a dichotomy. You can make tons of money, but you can also suffer financial ruin. Try to choose wisely when considering purchasing a property, and thinking about how to fund it. The article below guides you through what you should know before embarking on any commercial real estate venture.

 

Know the cost of the utilities

 

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.

 

In order to secure the very best available terms for escrow on a real estate deal, the escrow arrangements should be reviewed by a professional with experience in the field. A real estate agent, financier or investment professional can examine the paperwork in detail, and let a buyer or a seller know if they are being taken advantage of.

 

If you are a landlord looking to rent out a house or apartment, it is crucial that you have the tenant fill out an application and go through a credit and background check. You do not want to be stuck with a tenant who won't pay rent or trash your house, so also ask for references.

 

If you are looking to purchase and then eventually lease a commercial property, try to find a building that has a lot of space. Trying to lease out dwellings that are too small is going to be hard-- people want to be in a spacious area, not a claustrophobic one.

 

Tips for finding a good deal

 

The most successful commercial real estate investors are the ones who can find a good deal and know when to walk away from it. Develop an exit strategy and know how to calculate your minimum acceptable levels for payoff, returns, and projected cash flows. No matter how appealing the property may seem, do not hesitate to drop it if it will not perform to your expectations.

 

You know already that you're a motivated buyer; now you just have to find an aptly motivated seller who is ready and willing to list and sell their property for well under the market value. Seek out owners of commercial properties who have a pressing need to sell and are therefore more open to negotiations.

 

Consider detention space as you are determining the space offered by the commercial real estate listings you view. A detention is often required for controlling rain water run-off and other run-off, which could take a great deal of space from the overall property - as much as 15% of land you need for business operations.

 

As was mentioned earlier in this article, commercial real estate is not a free source of money. You need to pour in time, effort, and a large initial investment, in order to make sure it succeeds. You still might lose money even after doing all of that.

 

Feel free to post your comments below!