If you are looking to buy commercial real estate for the first time, then it is essential to educate yourself on how to maximise the potential you get for your investment. Lots of businesses fail because they make the wrong decisions early on, and making a poor property decision can see you left in a hole of debt and one that you can't sell.
Here are the top 10 tips that will help you decide what properties to buy. Don't make a poor decision, or your decision will make you poor.
1) Rushing your decisions will leave you nowhere. It is unquestionably exciting to make the first steps towards making your business dreams reality. However, would you sooner have them come true briefly, vaguely and quickly, or gradually, firmly and permanently? If it is the first, then fine, buy the first place you see. If the second, then keep reading.
2) You have limited knowledge in this area, and you must acknowledge this. Because you don't, not to the extent that an expert would. TV and the bookshops are filled with the advice of people who've made millions from property decisions, who know the market, recognise the pitfalls and have the benefit of years of experience. It's no shame to take advice from an expert.
3) Make a plan and stick to it. There's a limit to what you can make from your business, and the best-laid plans can go awry. From the very beginning, make sure you're on track with the numbers and do not let idealism hinder. The figures involved are not just numbers on a screen - they're your future, so don't play around with them.
4) Get out there and do some physical work. Check out the area in which you're looking to invest - what is nearby, what are other people paying for property in the locality? Talk to the locals, especially other shop owners in the suburb. Question them if they could choose to move, would they? How much did they pay for their spot?
5) Three simple words. Supply. And. Demand. You might have big ideas for your project, but if someone else in the area who has the same ideas a few years back then they've got a massive advantage. Is there a need for what you're going to provide? If so, go for gold. If not, keep looking for other areas.
6) Don't be scared. Yes, it's crucial to do the leg work, and the paperwork, and all the other work as well. But remember, while you're sorting out the finer details, remember that a project requires final action. Don't miss out on a great deal because there's some minor detail you haven't got pinned down. A bit of multi-tasking will let you to get it fixed.
7) Make people remember who you are. People will remember the guy who came up and spoke to them, who shook their hand and showed an interest. So if they get wind of a good deal floating around they may put two and two together and get you.
8) Don't be narrow minded. The deal may be close to completion and suddenly a problem shows up - something the vendor had kept hidden. The temptation to just shrug and sign may be going at you, but ask yourself why he kept quiet before doing anything silly.
9) Look for a motivated seller. It may cause you some moral problems, but sometimes people are selling up and moving out due to circumstances beyond their control. This drives down the price of the property. Don't feel bad about being a shark, realise that there are several people out there who'll screw the guy even worse. You can be sympathetic and still get the deal done. In fact, showing understanding can put you at the head of the queue
10) Good luck! Let's face it, luck always plays a part in business success - when you get a break just make sure to maximise it!
This article is brought to you by Tim Green Commercial - Find tips and tricks to buy Commercial Real Estate |
