Purchasing real estate related to commercial purposes is a lot different from purchasing a home. Read on for some tips and suggestions that will help you come out ahead.

One of the most critical considerations for valuing a commercial property is its physical location. What type of neighborhood is the property in? Compare the growth of the property’s neighborhood to similar neighborhoods around the country. You’re not only thinking about the here and now; you want to look a decade down the line too. Pick an area with the potential for sustainable growth.

When choosing a broker, ask about their experience specifically in the commercial real estate market. Be sure that they specialize in the area that you are buying or selling in. Also, consider entering into an agreement that will be exclusive between you and that broker.

Educate yourself about the measurements of NOI: Net Operating Income. In order to be successful, the resulting number must be positive.

Even though you may be running a business and ultimately need to secure profits, it’s important that you don’t embellish prices in an attempt to get an extra dollar. There are many variables that can greatly impact the true value of your lot.

Check a commercial property for access to electricity and other utilities; make sure there is good access. Every business requires certain utilities, most commonly things like water, sewage and electricity.

Commercial Real Estate

You have to think seriously about the neighborhood where a piece of commercial real estate is located. Affluent neighborhoods tend to have residents with larger budgets, making a commercial real estate property in such an area is a great choice. However, if your products or services correspond to a specific social category, make sure you find a property in an area that corresponds to your target audience.

Lower the risk of default by eliminating as many things that can be labeled “event of default” as you can prior to negotiating a commercial property lease. Decreasing these will prevent tenants from performing a default on the lease after your negotiations. A default is frustrating and costly.

Be sure to have a professional building inspector go through your property before you put it up for sale. Fix all problems that they find as soon as possible.

Go on a tour of all potential properties. Consider taking a professional contractor along with you as you look over the properties that you consider buying. Set the stage for future negotiations by putting forth the preliminary proposals. Before making any sort of decision after a counter offer, evaluate it once and then evaluate it again.

Dual Agency

Before paying any agent, check his or her disclosures; these can tell you a great deal about the agent’s character and ability. Try to beware of dual agency. Dual agency refers to a situation in which a real estate agent represents both the landlord and the tenant in a commercial transaction. In effect, while you are paying the agency, they also work for the opposite side; if you are a prospective tenant, for example, the dual agency represents the landlord, as well. Real estate agents must disclose any dual agency. Both the tenant and the landlord must agree to accept dual agency.

There are obviously countless things to think about when looking to purchase commercial real estate. In order to get the best possible deal, be sure to follow this article’s advice.

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