Tips To Make Your Commercial Real Estate Transaction Process Smoothly
From the October 6, 2009 PBS
There are currently some very reassuring factors about the commercial real estate market that should leave you feeling great. But for every aspect of the market that improves, there are two more that decline. Make sure you read these tips before dealing in any type of commercial real estate.
It is getting harder to rent apartments with a new generation of picky renters. A great way to get your apartment rented is by adding furniture. Adding furniture is a great incentive that really adds a personal touch to a home and makes the future tenant feel at home. Providing furniture will ensure that your apartment is rented in reasonable time.
Rehabbing the kitchen and bath areas also help get the apartments rented faster. Apartment remodeling can have a big affect on increasing both the speed with which the apartment rents as well as the size of the rent you can demand.
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Be careful when you are purchasing a property and make sure that it does not have any hazardous waste problems. When commercial properties have this type of problems it becomes the responsibility of the owner to handle it even if they were not the ones that caused the problem.
You should take measurements to be sure the data you are using to promote the rental is the accurate square footage. If you don’t, then the prospective tenants may use it against you and try and negotiate a new deal.
When purchasing commercial real estate for the first time, be prepared to take your time in learning the contracts, deciding what kind of property you wish to purchase and how to make offers. It may be frustratingly slow at first, however, once the first purchase is completed the deals will progress more quickly.
Write an easy-to-understand letter of intent, focusing on the biggest issues. You can worry about the little things later on. This will get the hard part out of the way as you will find that solving the smaller issues later on will go much smoother.
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Make sure you match the type of property you have with the type of loan. If you have a small loan request, take it to a small bank. If you have a large loan, take it to a larger bank. This way you will be getting the service you need.
In order to find a reputable real estate broker who is going to suit your needs, ask your preferred choices some questions, including their idea of what constitutes a success and a failure. Find out what criteria they use to determine their results. You should be on board with their techniques and strategies. Don’t work with any real estate broker whose beliefs and methods aren’t in line with your own.
If you are not making enough money with your investment, consider raising the rent. You should justify this increase by explaining to your renter why you cannot afford to manage your property with the rent they are currently paying. Give them enough notice so that they can look for something else if the new rent is too much for them.
Before you buy property, make sure you will be able to make money out of it. Find out how much the previous owner was making out of it. You should consider how much of an investment this property represents, and how you can improve it so that you can make money.
While comercial real estate can be very lucrative you do have to make sure that you know the pros and cons of any deal you become involved in. Know the solutions that are possible for the negative aspects and only move forward when you feel you have an understanding of what it will take to make the investment a success.