Tuesday, 2 August 2016

Tips for Commercial Real Estate Investors

Investments in commercial properties have their own perks. Better market income, good price, and budding start-ups are just a few points among much more that attract the investors on this side. So, here are some guidelines to help you make a profitable deal in commercial property investment

  •  Do your Homework

It is one thing to invest in residential properties and a totally different venture to go for commercial ones. Here, the income is based on per square feet usability of the land. Higher cash flow than residential properties and longer leases are some other differences. Furthermore, the down expected by the lenders in commercial properties is higher.

  • Have a Sharp Eye 

If you can walk away from a deal, you have it in control. Have good inspection about any mandatory repairs, damages etc. Having knowledge of this gives you and upper hand in the negotiation. Moreover, risk assessment in the investment is also equally important.

  •      Know the Terminology

           Some common word used in commercial real estate for metric purposes      like, Capitalization (Cap) Rate, Net Operating Income, Cash On Cash etc.

  • .      Finding Sellers

Always go for the ones desperate to sell below the market value of the property. The more pressing reason is for the seller, the better deal you’ll make.

  • Check out the Neighbourhood

Nothing is more informative about a property than its neighbourhood. Enquiring about the property from the neighbouring owners is a smart move.

Thus, a well strategized investment in commercial real estate can earn you fortune while a small carelessness can cost you the same.

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