Avoid Commercial Property Disaster: Six Preemptive Steps
By Don Cramer
Investing in any particular piece of commercial real estate will take a significant amount of your financial resources. So, it is very critical that you do everything you can in advance of the purchase to know that your acquisition is going to pay off. Keep reading for the six things you should do before the deal to make sure you are playing a winning hand.
Find a private inspector and hire them to look the potential property over. Even if the property in question has been looked over by the owner’s inspector or a government inspector, you want someone who is accountable only to you. It is best to find an individual that has no connections to any parties involved and has never looked at this property before. You want a trained and objective person giving you a full account of what risks this property might carry.
Spend some time getting to know the area. Start online and look up demographic information about the zip code. You can quickly find out population statistics, income ranges and languages spoken. Dig further for crime rates and recent police reports. Try and grab some meals at the closest restaurants. You never want to eavesdrop on other people’s conversations, but you can strike up small talk with locals and learn their thoughts about the community.
Look past the potential purchase price of the property you are looking at. Look at real estate, both commercial and residential, in that area for overall economic trends. Are values falling or rising? You could risk getting stuck with a property you can not later unload unless at a loss. Likewise, if values are going up, you could be facing higher property taxes, although this is less of a dilemma if you can pass this one to anyone you rent out too.
Find out if there are zoning and building laws in the area you are looking at buying. These can really hamper any particular plans you have for the property, as regulations can decide what you can and can’t build on vacant land. Zoning laws can also dictate what you convert an existing structure to.
If you are looking at a property that is not properly up to code, pass it over and move on. Regardless of how tempting the location or price that drew your attention might seem, unkempt properties can be financial holes. Whatever you see with your naked eye that needs fixing likely means three or four more problems you do not see, as the property obviously was not kept up by a previous owner or tenant.
Remember that size matters, but maybe not in the way that you think. Larger tracts of land can mean larger recurring property tax bills, and bigger buildings mean more heating and air conditioning going on. Where you want a big number is in retail buildings and apartment complexes. The more units you have within these to rent out, the more income streams you get from a property. Every additional lease is more financial stability in your investment, and bigger profit margins.
When you apply the ideas listed in the six preceding paragraphs, you can greatly increase your chances of putting your money into a property that will give you that money back and then some. Make these six preemptive steps habit in all your commercial property hunting to find continuing success.
Take a look at our website for more resources on selling or buying properties in Port Charlotte Florida at: Investing Port Charlotte Real Estate. We also have readily available e-books dealing with purchasing, selling, and making an investment in property. If you’re an real estate investor regardless of whether it is good times or bad times, Florida property is an excellent investment. Please do not wait to contact us through our website, Investing In Real Estate Florida, when you have questions or want any type of real estate information.
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