So, you have made the decision and are now ready to get into commercial real estate? Of course, you are plagued with questions, and luckily, this article will give you a lot of the answers you seek. Here is some advice to get you on your way in commercial real estate.
Volatility in interest rates is one of the biggest risks to investors of commercial real estate. The economy makes it likely that a good loan today could be gone tomorrow, so it’s likely that an investor who waits too long to close a loan could end up having to pay much higher rates. Interest rate fluctuations should be taken into account when evaluating your long-term goals and profits.
Confirm that basic utility services are already situated at the commercial property. Your business may have unique utility needs, but at the very least, you probably require hookups for electric, sewer, water and most likely, gas.
More is better when it comes to buying a property with multiple units. You can spread your wealth that is obtained by each one, by having more units. Some buyers won’t even consider properties that contain fewer than ten units, because they believe that more units means more income to be made.
This is done so you can verify that the terms match the rent roll and the pro forma. If you fail to closely examine these terms, you may not notice that there are terms that were not thought about with regards to the rent roll, altering the pro forma.
When purchasing commercial real estate, always keep your goals in mind. Determine what you’re going to do with the property ahead of time. For example, decide whether you’re going to use the property for your own business or if you want to lease it to other business owners. Have some clear goals before you look for commercial property, it will save you time and a lot of work.
There are real estate brokers who deal exclusively with commercial investments. Full service brokers work with both landlords and tenants and there are agents representing tenants only. A tenant’s-only broker may serve your needs better than a full service broker.
Be extra careful when inquiring about a commercial property’s square footage. In commercial real estate, square footage can be reported in usable square footage only, or the total square footage which would include walls and unusable space as well. It is a good idea to know measurements for each type of square footage. This will allow you to make decisions and speed up the process.
You should now be ready to purchase your first commercial property. You might have thought you had enough knowledge to get started before reading this article; now you should be even more prepared. The tips from this article have shown you how to get through any commercial real estate journey and be able to be successful in
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