As a matter of fact, commercial real estate offers more profit potential than even residential properties represent. Finding appropriate commercial real estate opportunities is more challenging than finding residential opportunities. Thus, read on to learn how to understand the profit potential of any piece of commercial property and how to make wise investment decisions.
Consider the surrounding area when you buy a piece of commercial real estate. If you buy property in a very affluent area, your business will likely be successful, because your clientele will be better able to afford what you are selling. If your business services will do better in a poor neighborhood, buy property there!
When you are looking to buy or sell commercial property, don’t forget to leverage your network of contacts. For example, commercial real estate commonly sells without being listed. However, the larger your network, the greater your savvy, and the more likely you are to be informed about outstanding opportunities.
It’s a good idea to purchase properties larger than you actually need when buying commercial real estate. The thinking behind this is that if you have been able to get the financing and deal done on a property with five units you rent out, then you can handle a property with ten or even twenty units and get a lower average unit price.
Be mindful of the environment that your possible property is situated in. Since the responsibility lies at your feet, if there is any environmental waste that needs to be cleaned up, you will be the one who has to do it. Are you considering a property that is located in a flood zone? Think again! Talk to an environmental assessment agency to learn more about the area where the property is located.
Do a walk-through of each property on your short list. You can even take a contractor with you to provide expert advice. Put forth your initial proposals, then open the table for negotiations. Carefully look over any counteroffers you receive before you make your final choice, whatever that may be.
Determine your business goals before you start your hunt for commercial property. Make a list of the property features most important for you, such as square footage, number of offices, conference rooms, and restrooms.
Maintaining and cleaning commercial properties can be costly, but occasionally it is possible to save money. You’re only liable for cleanup costs if you had an ownership interest for the property in question. If you buy a Superfund site, you might be liable for millions of dollars in cleanup costs. Speak with an environmental assessment company about getting a report from them. The expense may be offset by what is discovered.
It is important that each property offers unhindered access to utilities. Water and sewer access will be needed in addition to electricity. You may want the option to use natural gas, as well.
With what you learned, you should now know some good basics when it comes to investing in commercial real estate. Make sure you are flexible so that you can always be informed and know what to do in any type of situation. This way, you will be ready to jump on opportunities as soon as they arise so you can get the best return from your investment.
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