3 Tips for Buying Commercial Real Estate
The term commercial real estate refers to property that is used for commercial purposes. This could mean storefronts, land with the potential for profit, and rental properties. Examples of commercial property would be office buildings, malls, grocery stores, and more. Commercial properties are also divided into five categories such as multi-family, office, hospitality, retail, and industrial.
Commercial real estate is subject to different laws, financing, and taxes than residential real estate. While the purchase of this type of property is an exciting investment, it can be a lengthy and complicated process that the average person isn’t familiar with. Since there is so much to be known before making such a big decision like this, here are a few tips for purchasing your first (or next) commercial real estate property.
Know Why You Want to Invest
Before you begin searching and investing time looking for commercial real estate, it’s vital to ask yourself why you are wanting to make this investment and if it’s right for you. If you are unsure of your ultimate goals, you may want to reconsider. Here are some questions you may want to ask yourself:
- What kind of property do I want?
- What do I plan to use the property for?
- How much of a down payment can I make, and is this feasible?
- Will I need a property manager?
Arrange Your Financing
It is important to ensure that you can afford your investment before starting your search. Securing financing ahead of time allows you to create a budget and compare your financing options before committing to a deal. To find the best rates, speak with several lenders and consider various loan types.
If you know what kind of financing options you have before you begin your property search, you will know exactly what you can afford and the process won't be stalled.
Do Your Due Diligence
When you begin your search for a commercial property, your real estate agent will show you quite a few before you settle on one you think is right for you. Refrain from feeling rushed to purchase the first one you see.
It is important to consider the price, allowed uses, condition, and location. In areas near downtown, hospitals, universities, and busy areas, properties sell more quickly and for a higher price. Ask yourself some more questions such as:
- Is it worth taking risks for the potential rewards?
- Is there another property that would suit my needs better?
- What has this property been used for in the past?
- Is there any maintenance that would be required immediately?
316 Realty Group is Here for You
It goes without saying that identifying a property to buy can take time, a lot of money, and the help of a professional is definitely needed. Finding someone who is aligned with your goals is important. Finding and purchasing commercial real estate is a complicated process with many facets, and you'd be better off working with an expert than trying to figure it out on your own.
316 Realty Group offers commercial real estate services in the greater Houston, Dallas / Fort Worth, Austin, and Waco markets. You can rely on our team to help you develop an investment strategy, search for properties to purchase, analyze the deal, acquire concessions, negotiate the terms, and identify the best options. Contact us today, we look forward to working with you!
What Does a Commercial Real Estate Broker Do?
We all know what residential real estate is all about and what those properties are used for: living. Commercial real estate, on the other hand, can be used in a plethora of ways, from a business to a health facility, to a warehouse, to apartment complexes, and more. Commercial real estate brokers must also be well-versed in tax and zoning rules, as well as market statistics, financial analysis, and more. To protect your best interests and get the best return on your investment, you should always hire a broker for any of your commercial real estate transactions, just as you wouldn’t build a house without an architect or file taxes without a CPA. Here we will go into more detail on what exactly commercial real estate brokers do.
Buying
A commercial real estate broker assists clients in searching for and purchasing a commercial property, including performing a thorough search on listing platforms for any suitable properties and negotiating the best possible purchase price and terms for their clients.
Selling
A commercial real estate broker also assists clients in selling commercial real estate assets by conducting comprehensive market research to determine the best listing price, implementing advanced marketing strategies to attract eligible buyers, and negotiating the best sale conditions. Other aspects of the sale will also be handled by these brokers, such as organizing walk-throughs and marketing the property.
Leasing
Lastly commercial real estate brokers assist landlords and tenants in finding commercial real estate premises to rent. They also negotiate the best lease terms for their clients and implement market research to set rent and other fees. Other responsibilities include locating high-quality renters, and when working on behalf of a tenant, locating the greatest deals on spaces that match the client’s specifications.
Advantages of Hiring a Commercial Broker
Networking Locally
Commercial real estate brokers establish connections with prominent members of the community where they plan to work. When a commercial space is on the market or a potential buyer appears in the area, this gives them a competitive advantage.
Knowing the Zoning Laws
Many people shy away from investing in commercial real estate due to the many complicated rules and regulations governing commercial real estate taxation. The fact that these rules and regulations differ across states, industries, and zones adds to the complexity. To perform the aforementioned procedures on behalf of their client and therefore eliminate a barrier to commercial real estate investment, a commercial real estate broker must have a thorough awareness of tax and zoning rules.
Client Negotiations
Commercial real estate brokers must be excellent negotiators and mediators because they deal with more than two parties when arranging a sale or lease. Conflicting incentives are common among the parties, which a commercial real estate professional can help resolve through talks. The ability to communicate and persuade is essential for a commercial real estate broker who wants to negotiate successfully.
Seeking the Help of a Broker in Texas?
It’s always in the best interest of one to have access to the knowledge and expertise of a commercial real estate broker when buying, selling, and leasing a commercial property. This definitely isn’t a task you want to take on by yourself! If you are searching for a space or even want to know what options are available to you, reach out to one of our agents with 316 Realty Group. We are always ready to exercise our professional expertise for you!