Friday, March 29, 2013, AM | 7 Comments
The current climate in the commercial real estate market scenario is a frenzied one. With economic instability on one end creating a scenario of a scrambling competition among sellers wanting to make money on their investments to a growing demand for high end real estate among buyers looking to expand businesses or make a sound investment of their own.
A good example of this would be the commercial real estate in Mumbai India where prices are sky high and competition is fierce even though there is a demand thanks to the city’s super fast paced growth.
If you are venturing into the commercial real estate sector and looking to buy a property, it is natural you want to get your hands on the best deal possible.
Although sometimes it feels like finding a good deal is the luck of the draw, a little hard work and research can get you further and increase your odds of finding that amazing investment deal.
Listed below are a few ways to help you score commercial real estate at figure you will be comfortable with –
Know your target market
The first big step is to figure out what commercial real estate is all about and how it differs from residential property as an investment, especially if you plan to give it out on lease or rent and not use it yourself.
Find out how much rental income you can earn from the property (it differs greatly from residential rental income), what the usual lease term agreements are, what the lending and loan rates are etc.
This will help you ascertain that you are definitely ready for commercial real estate ownership and then you can look for the best property for you.
Contact as many agents as possible
Finding a hot deal on commercial or any kind of real estate for that matter is easier when you have more people on the job.
Real estate agents are aplenty and all looking for their own good commission, so talk to a few reputable agents and delegate your work so you can reach a wider network of potential sellers.
Keep an eye out for distress sales and motivated sellers
It has become unfortunate that there seem to be many sellers in distress right now looking to offload great pieces of commercial property due to their own financial hardships, but it can be good news for new buyers.
Check listings for foreclosures and reclaimed properties, short sales and the like, sometimes the rates are dirt cheap due to the circumstances. Words like ‘must sell’, ‘on sale by owner’ ‘needs work’ and the like sometimes indicate a quick and therefore cheaper sale is a possibility.
Don’t discount word of mouth
Don’t overlook the power of good old word of mouth when it comes to finding hot property deals. If you are serious about investing in real estate spread the word among family and friends because you never know who is selling and so on.
Also purchasing from a known source even by association make the process smoother and more amicable. Some people also recommend talking to your accountants, CPAs, lawyers and other people who are in the know about tons of people and their affairs.
Learn to distinguish a good deal from a bad
It is easy to get swayed by a really, really great deal and a very low below market asking price, but sometimes things really can be too good to be true.
A true great deal would mean that it covers all your needs as well as has potential for future income earning and sale. Assess all risk factors, factor in damages and repairs, growth of the property in terms of its location and other factors that will eventually tell you if this is a good deal for you or not.
Rajesh Tyagi is a real estate agent in Mumbai. He often is busy finding really good commercial real estate deals for his clients and advising them on the same. He believes that when it comes to commercial real estate, Mumbai is growing by leaps and bounds and is a good choice for investors. He also writes for http://www.thecapitalbkc.com/.