March 16, 2012
Posted by: admin ?: ?Category: Loans/MortgagesA lot of people want to sell their property for one reason or another. They often request brokers to list the property as an ideal investment in addition to a listing under commercial real estate category. Although a good idea and investment point, the seller must be confident that the property is worth as a commercial investment else buyers will not be interested at all.
An example is when a seller wants to place under commercial real estate an office building which has been abandoned for a long time and located at the far end of a street with very bad road conditions. The building did not have tenants nor was anyone interested to lease the place at all. Now this is a clear sample that selling such property may not be a good idea.
Buyers are interested on commercial real estate when there is potential revenue that can be generated from it. Properties with sound tenants would certainly catch the attention of those who want to invest in real estate. Investors would not only look at the current revenue numbers but will consider improvements to be made on the property. Thus dilapidated or worn out properties may not also have interested parties.
Possible investors in commercial real estate check on the current income streams. These can be the rent income that a building or land generates at present. Wise investors do not make a decision until they make projections on the return of investment. Next thing is to look at the long term profitability of the property say 5 to 20 years from the time it is purchased. Do not be misled by sellers showing off the property and talking about the potential of such property if a mall or a gas station would be built on it. A property already generating income and having the least improvement expenses would be the perfect investment.
As to the type of tenants, some investors frown on single tenants especially for a big property because this can mean risks once the tenant leaves. The leases of tenants should also be checked since this is where income will be derived from the commercial real estate.Whether the property is fully leased out or nearly full should be clarified. A seller would normally say that the occupancy is not a problem but this can be an overstatement. Investment should be poured in a property that is already having full occupancy. This will not cause further headaches on the investor to spend money on advertisement to rent out the property spaces. The criteria cited herein may limit the number of commercial real estate available but then the risks will also be lesser in the long run. A thriving property is a sound investment rather than one that has not made any income for the original owners. For sure there are properties that are for sale with high potential for profit and this is the one for a wise investor.
The SBA 504 loans are the best commercial real estate loans for entrepreneurial small business owners looking for commercial property financing.
rally squirrel rally squirrel scumbag steve scumbag steve day of the dead rocksmith blackbeard
No comments:
Post a Comment