|
Real Estate Investing Articles
Commercial Real
Estate - Three Profit Making Tips
Andrew Wilson
Commercial Real Estate
Projects are, in many respects,
the same as residential real estate investments except for
their size. A commercial develpoment may well be many
times larger in scale and thus require much more money.
In this article we examine three of the most significant
non-financial issues that an investor should consider before
investing in a commercial real estate deal.
1) Selection
of tenants
Given that most real estate investors are buying property
to generate cash flow and generate profit from asset
appreciation some time looking at the tenant mix of a
commercial building can determine the potential profitability
of a project.
Seeking creditworthy tenants may well assist in gaining
finance on good terms from potential lenders - many lenders
will make an offer that is based upon the credit rating of the
larget tenant. So, finding a project with creditworthy tenants -
or, at least, the expectation of finding them is a priority.
Analysis of the tenant mix with a view to optimising it is an
important part of the buying process.
2) Property
Zoning
Success in real estate investment has much to do with
land zoning. If zoning should change during redevelopment
of a property then there will be significant additional costs
associated with changing the use of the property to meet
the new regulations. Due diligence is the key here. Hire a
real estate attorney to check on the property to find out if
there is a likelihood of re-zoning and other legal issues.
Use the attorney to check that, for example, all necessary
accesses are available and that rights of way have been
established and any development will not cause rights of
way conflicts.
3) Check Utilities
A thorough inspection of all utilities and their condition
is mandatory. Reinstalling electrical systems and piping
can be very costly and any defect should be factored into
the offer price. In the worst cases, where pipes and wires
are emebedded in walls, ceilings and underfloors the cost
of renovation may make a project non-viable without
complete demolition.
So, spend some time
with an appropriate legal advisor,
check and optimise the tenant mix and ensure that
utilities are in serviceable condition. Although these
factors may not be an immediate part of the financial
considerations they should be as shortcomings in due
diligence can prove expensive and, of course, issues
uncovered should be reflected in the purchase price of
the property.
Article Source: http://www.articleshine.com
About the Author:
Andrew Wilson runs a website about real estate that
offers a huge amount of information on the subject of
real estate investing. If you are interested in how to
increase your wealth with real estate check
www.realestateinvestguide.com out
More
Articles
Real
Estate Investing Resource: Rake in $10K or more in 60 Days
Without dealing with
a single tenant, smug banker,
or even having your credit pulled.
www.skyvaultpublishing.com/notenants.html
Internet
Marketing Resource: Make $500 a week in 15 Minutes
New fail-safe system
virtually runs 100% on autopilot.
Earn enough guaranteed cashflow to quit your job in a month.
www.skyvaultpublishing.com/cashvault.html
Real
Estate Investing Resource Directory -
Learn how quiet fortunes are being made all around you, by everyday people,
every day of the week. Forget about the bank's requirements - people who
know what's really going on, never use their own cash or credit
anyway! What you must have is knowledge - get yours here.
www.reidirectory.skyvaultpublishing.com
Ebusiness
Resource Directory -
Discover products, tools, tutorials, software, and loads of information
you never knew existed. No need to scour the web; take advantage of our
years of experience and to build your business model, set up your web
site, generate traffic, and create a hands-off residual income.
www.ebizdirectory.skyvaultpublishing.com
Affiliate
Products You Can Make Money With
- Looking to create income online, but don't have your own product yet?
Simple - just sell other people's products, and make a fortune doing it!
Here's a selection of quality products you'll be happy to stand behind.
www.affprogdirectory.skyvaultpublishing.com
Free
Real Estate Investing Videos -
Get Yours Now
|
