Owning commercial rental property can be a
great investment if you are clear about your goals and shop smart. There are a
few things you need to know in order to get involved in commercial rental
property. If you hire the right real estate agent to assist you, the investment
could be a great one in your future. Use these steps to learn how to buy
commercial rental property.
Write down what you are looking for in a piece
of commercial rental property. Consider the size of the building, whether you
want one that already has tenants and whether you want office space or
customer-oriented businesses, such as cafe's or bookstores. These are all
important aspects of the decision you need to address with yourself before
talking to a real estate agent.
Talk with a mortgage lender. If you are in
need of a loan for your purchase, find a mortgage lender you trust that handles
loans for commercial property. It is wise to have pre-approval with the
mortgage lender before getting a real estate agent. Doing so already allows you
to know the price range you can consider and help you identify the properties
you qualify for.
Find a real estate agent that specializes in
commercial property. Tell her what you are looking for specifically and be
available for questions and viewings of potential properties. Also, take the
time to talk with them and understand the differences in the process of buying
commercial property as opposed to residential property.
Complete the purchase process and set up your
commercial property the way you desire. If you buy property with tenants, this
will be an easy process. If you have other obligations, hiring a property
management firm may be the way to go to get tenants in place and enforce the tenant
regulations you put in place.
with leases on your commercial property, you should consider two basic types:
ground leases and net leases.
leases: Ground leases are leases for use of the total land. In most cases, such
leases provide for improvements to be made by the user to the land. For
commercial real estate properties with businesses like gas stations or rental
homes, this is often a good way to go so that the user can make improvements
that may help them as well as you.
Net leases are leases that require the user to pay not only rent, but also
property taxes and other such expenses. These are good for commercial
properties in which you have a lot of ownership expenses. Such leases are great
investments usually, because you will have little overhead with your
Get the right property, get a lawyer, and set up the right type of lease
and you will be ready to have your own commercial property. Buying isnít hard;
you just have to have all of your ducks in a row.