Tips When Buying Real Estate for Commercial Purposes

A commercial property can be a very good investment since it would let you earn money twice as much compared to the money that you can make when you buy a residential property. Therefore, if you want to know whether you are making a wise decision or not, here is a couple of real estate buying tips if you want to purchase a commercial property.

• Check out some real estate buyers guide magazines so you can see the right commercial property that would fit your needs. It is important that the property has a Land Information Memorandum. This can be usually acquired from the local state or council where the property is located. With this, you will know how much the assessed value is and if there are any potential as well.

• One of the most advisable real estate buying tips for commercial properties is that you ask for a low down payment while getting a long term loan at the same time. In this way you can still maintain the capital that you have to spend for you investment.

• Ask for the help of a commercial agent. His knowledge and expertise would help you compare all the sales, potential for growth, area demographics, and so many others before you establish your investment or develop the area.

• Analyse why you should buy the commercial real estate property. See to it that you buy it because you have the right reasons. Think whether you would gain more profit if you would rent it or you can earn more if you would buy it instead.

• If you are already decided to buy the commercial property, make sure that you buy a bigger area than what you are thinking right now. A bigger space gives more rooms for expansion and improvement.

• Those who are in short of cash may want to consider getting a partner or asking a business owner so that you can have someone to share the down payment with. It would be better if you would consider a family or a friend to be your business partner so you will know how he handles investments. Put everything in black and white especially your agreements.

The success of your commercial estate property will depend from all the little decisions that you make prior to the development of the property. Just follow these real estate buying tips and you’ll be on your way to a thriving investment.

Commercial Real Estate For Beginners – How to Secure Your Retirement With Residual Income

With many Americans now realizing they can’t depend on the government to take care of them in old age, investors are now turning commercial real estate investing because they know it’s time to face the hard reality that it’s time to take care of their own financial futures. While some may aspire to be “rich,” others see financial independence as a necessity when it comes to surviving and enjoying their retirement years. Savings accounts grow too slowly, as do bonds, in order to create the growth and income most investors seek for their retirement portfolios. Smart investors tolerate risk and volatility in search of the higher returns that will help their nest eggs hatch and grow into cash cows.

One asset class that has traditionally met these goals is the stock market. Low-fee, high-growth mutual funds have an excellent track record when it comes to long-term returns. However, many investors feel frustrated by the sense that there’s nothing they can do to improve the performance of their stock and mutual fund portfolio.

That’s why investing in real estate makes so much sense.

Many investors dip their toes in the water with a few rental homes or a small apartment building. That’s a great place to start building wealth and learning the commercial real estate industry. However, for investors looking for serious retirement income that can be relied upon to grow in a hands-off portfolio, commercial real estate certainly has its place.

Commercial real estate for beginners is not something to be entered into lightly. It’s hard to read a book or talk to a broker and really understand everything that’s involved in making and financing a good real estate deal, and then managing your property once you have it in place.

I think the two best ways for beginners to get involved in commercial real estate are to a) Work their way up through the ranks of owning smaller properties or b) Work with a mentor of some kind – ideally another property owner in your marketplace – to find out what they do, how they do it, and why they do it. You can find a lot of salesmen trying to get you started in commercial real estate by buying their magical business-in-a-box but their claims of simplicity from just following a simple system are often over-stated. You can get yourself into a lot of hot water in commercial real estate as a beginner unfamiliar with the business, so if you can’t afford to make a mistake, it’s best to grow slowly and pay your dues. When you do dip your toe in the water, let the voices of experience guide you and check with your attorney, CPA, and other investors in your area to help you confirm you are on the right track.

Commercial Real Estate For Business Owners

With interest rates now at historically low levels and the United States economy growing at a strong pace, many business owners have been considering the purchase of commercial real estate for their business locations. The benefits and drawbacks to commercial real estate ownership vary from business owner to business owner but potential buyers should educate themselves about the obvious and sometimes hidden benefits to the ownership of a commercial property. Below are some of the major benefits to ownership as opposed to leasing a commercial space.

Tax Deductions

For many business owners one of the primary benefits of commercial real estate ownership are the tax deductions that can be taken on the interest portion of the monthly commercial loan payment. These deductions can be substantial and each business owner should consult a qualified tax specialist about their unique situation.

Equity Appreciation

On average, commercial real estate properties will appreciate about two to three percent above inflation over the long term. This equity appreciation can result in significant financial gains over a period of decades.

A Retirement Fund

Many small business owners will not receive a pension when they decide to retire. The equity appreciation on commercial property can be significant. An owner can decide either to sell their property at retirement, cashing in on equity appreciation or lease it to another business for a continuous retirement income stream. In fact, in many situations, a business owner may be able to lease out an unused portion of his property, such as a spare office, before retirement for additional income.

Added Value To Business

As opposed to residential loans, many commercial loans are assumable. This makes the business and real estate much easier for a buyer to acquire and enhances the value of the business tremendously.

No Taxes To Pay On Your Rent

When a business leases their real estate they must pay sales tax on the rent paid to the landlord. When you own the real estate there is no tax to pay on the rent. The savings can be significant.

Easy Access To Financing

Great fixed rate loans for terms up to 30 years are now available for owner occupied commercial properties. In fact, in some instances, with strong financials, a business owner may qualify for loan financing up to 100% of the purchase price for his commercial real estate. Business owners should consult an experienced commercial mortgage adviser before making an offer on a commercial property.

In addition to the easily tangible benefits outlined above the business owner who purchases a property to house his business location will be able to have the satisfaction that only comes with ownership and he won’t be making his landlord rich.