What to Look Out for in Commercial Real Estate Listings
Thursday, March 11th, 2010
Dan Ross asked:
Choosing to buy commercial property is a big decision. You require a high level of investment and have to ensure that you don’t make a costly mistake. A number of websites provide commercial real estate listings of properties for sale. These lists are regularly updated. One can search these lists to gain a general idea of the quality of the properties that are available within a given budget. The prices of commercial real estate typically vary according to their location, size, and quality of construction. If you are planning to invest in commercial real estate, you should look at these lists these lists. Looking at these lists requires a great degree of skill, as it is important to read between the lines to uncover the true value of a listing.
Find out how many Commercial Property Listings there are in your local area
Your first step should be to find out what the best locations to buy commercial properties are. Often you will find that certain areas will have a high density of commercial real estate for sale, be wary of such pockets lest you find yourself buying a ticket aboard a sinking ship. Although it may cost you more money at times, make it your mission to find an area where companies such as your own have a proven track record of doing well.
Once you find an appropriate property from a commercial real estate listing, perform a thorough inspection before you buy Commercial Real Estate. While you may feel that a thorough inspection is not necessary as you are not going to be living there, this could not be further from the truth, as this is a business premises inspection it is just as prudent to thoroughly examine as a residential property.
Are you Buying Commercial Property in a Rural or Urban Setting?
When you look at a commercial real estate listing, the type of development where you are purchasing commercial real estate is very important, for instance if you are in a rural setting then you will be looking for very different features than if you were looking for a ware house for sale in an urban setting. Another thing to consider if you are in a rural setting is the cost, you can expect to pay lot less to be in a less developed area but if you are in a more developed district, especially a retail shop for sale or lease inside the city center you can expect to pay a premium.
Will you be buying this Commercial Property to rent out?
It is also important to consider whether you are buying commercial property for your company to actually move into, or whether you are going to rent it out to someone else. If your goal is to own the commercial property to let, then don’t get hung up on want you would like to see when buying commercial real estate, rather find out what the widest possible market is looking for in a commercial property for lease and acquire something that fits that description.
What are the tenant’s assets and liabilities?
It is a good idea to obtain a financial statement from the potential tenant that is occupying the space that you buy. The financial statement will list the tenant’s assets and liabilities. This will give you a good idea of how financially stable the tenant is. Would you like a tenant with $0 cash in the bank, a negative net worth, and credit problems? The answer is of course, no. Once again it’s surprising how many commercial investment property owners don’t do this and find out after the fact that it’s something they shouldn’t have done in the first thing. Now, this is all pretty easy as long as you do a good job of checking out the tenant in the first place.
While on the face of it a commercial property listing may appear straightforward, it is important to dig deeper and find out more before signing on the dotted line. Don’t be afraid to ask the right questions. Only when you are absolutely sure that all your questions have been answered to your satisfaction, you should proceed with the purchase.
Choosing to buy commercial property is a big decision. You require a high level of investment and have to ensure that you don’t make a costly mistake. A number of websites provide commercial real estate listings of properties for sale. These lists are regularly updated. One can search these lists to gain a general idea of the quality of the properties that are available within a given budget. The prices of commercial real estate typically vary according to their location, size, and quality of construction. If you are planning to invest in commercial real estate, you should look at these lists these lists. Looking at these lists requires a great degree of skill, as it is important to read between the lines to uncover the true value of a listing.
Find out how many Commercial Property Listings there are in your local area
Your first step should be to find out what the best locations to buy commercial properties are. Often you will find that certain areas will have a high density of commercial real estate for sale, be wary of such pockets lest you find yourself buying a ticket aboard a sinking ship. Although it may cost you more money at times, make it your mission to find an area where companies such as your own have a proven track record of doing well.
Once you find an appropriate property from a commercial real estate listing, perform a thorough inspection before you buy Commercial Real Estate. While you may feel that a thorough inspection is not necessary as you are not going to be living there, this could not be further from the truth, as this is a business premises inspection it is just as prudent to thoroughly examine as a residential property.
Are you Buying Commercial Property in a Rural or Urban Setting?
When you look at a commercial real estate listing, the type of development where you are purchasing commercial real estate is very important, for instance if you are in a rural setting then you will be looking for very different features than if you were looking for a ware house for sale in an urban setting. Another thing to consider if you are in a rural setting is the cost, you can expect to pay lot less to be in a less developed area but if you are in a more developed district, especially a retail shop for sale or lease inside the city center you can expect to pay a premium.
Will you be buying this Commercial Property to rent out?
It is also important to consider whether you are buying commercial property for your company to actually move into, or whether you are going to rent it out to someone else. If your goal is to own the commercial property to let, then don’t get hung up on want you would like to see when buying commercial real estate, rather find out what the widest possible market is looking for in a commercial property for lease and acquire something that fits that description.
What are the tenant’s assets and liabilities?
It is a good idea to obtain a financial statement from the potential tenant that is occupying the space that you buy. The financial statement will list the tenant’s assets and liabilities. This will give you a good idea of how financially stable the tenant is. Would you like a tenant with $0 cash in the bank, a negative net worth, and credit problems? The answer is of course, no. Once again it’s surprising how many commercial investment property owners don’t do this and find out after the fact that it’s something they shouldn’t have done in the first thing. Now, this is all pretty easy as long as you do a good job of checking out the tenant in the first place.
While on the face of it a commercial property listing may appear straightforward, it is important to dig deeper and find out more before signing on the dotted line. Don’t be afraid to ask the right questions. Only when you are absolutely sure that all your questions have been answered to your satisfaction, you should proceed with the purchase.
