Investing in commercial real estate can be a lucrative but stressful opportunity with many factors coming into the decision-making process. Keep the following tips in mind when shopping for commercial real estate in Barrie:
1) Prepare Financing and Timelines Early
Financing may be necessary when purchasing commercial real estate. Make sure you speak to a lender and get pre-qualified for a loan. With this knowledge in hand, finding an affordable property is much easier.
Be aware of the costs involved in purchasing commercial realty and keep in mind it often takes longer to close on a property than when purchasing residential real estate. Appraisals, inspections and environmental or engineering reports may be required – avoid added costs and time delays by planning your finances early.
2) The Type of Property and Investment
When selecting a commercial property, decide what type of investment you are looking for and the appropriate amount of time you will have to manage and commit. If you only have time to manage a four-unit complex, don’t waste time looking at properties with five units and above unless you decide to hire a commercial property manager. Are you looking for a work-in-progress or something that’s move-in ready? Determine what type and size of property is going to best suit your needs and abilities.
3) Search For Potential Properties
Once you have decided on the kind of investment property you’re looking for and your timeline and finances are organized, you can begin the search process. Browse local listings to see what’s available in your area. Working with a professional real estate agent can also streamline the search process for you. Commercial real estate agents in Barrie are knowledgeable, experienced and able to offer useful ideas or suggestions. They are familiar with the process of purchasing commercial real estate in Barrie and can offer invaluable advice.
4) Do Your Homework
Owning commercial real estate is a great opportunity to generate future income, so do the research on any property you are seriously considering. Review property history for the last few years. When are current leases expiring? Have tenants provided personal guarantees on the length of their tenancies? How much are their deposits? Looking to replace tenants a month after buying a commercial property can be very stressful. It is also a good idea to ask for at least a three-year history of operating expenses.
Find out if there is clear title to the property and be aware of any codes, covenants or restrictions in place. If you’re still uncertain on whether you’ve covered all your bases, speak to your commercial real estate brokers and get their advice on any unanswered questions.
5) Keep an Open Mind
Try to see the forest for the trees. While turnkey properties are great, up-and-coming properties can provide valuable returns over the years.
Keep a look out for lots adjacent to open property that can eventually be acquired for additional parking and expansion opportunities.
6) Negotiate the Price
When negotiating a deal, make sure your real estate broker provides you with current listings and recent sale prices of similar properties within the area. Be sure to analyze with your broker the anticipated future revenues and expenses of the property. Use this information to determine your offering price. When the price has been agreed upon seek legal-council and have them go over all contracts thoroughly.
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