5 Location Factors to consider in Commercial Property

5 Location Factors to consider in Commercial Property

Before you begin searching for a business site, you need to have a clear-cut picture of what you must have and how much you are able to pay. While many starts up mistakes can be corrected later on, a bad choice of site is sometimes impossible to repair.

·       Competition - Are the competing associations located near yours? Sometimes it is fine, like in industries where comparison marketing is famous. But if the competitor is only going to make your marketing job difficult, search elsewhere.

·       Proximity to other businesses and services – Watch out for other services and business that are in the vicinity from 2 main perspectives; 1^st if you can gain from nearby businesses by the client traffic they generate. 2^nd see how they will augment the quality of your company as a workplace; does the vicinity have an adequate selection of restaurants or shops and services your employees want conveniently located?

·       Economic policy - The economic system of a specific region may also affect your choice and the decision of site. Some recession favour capitalists and others are directed by socialism; where the government controls all businesses. Other sub-factors are government’s policy, exchange rates, fiscal and monetary policy, taxes, levies, and duties.

·       Industrial clusters - Some entrepreneurs decides to locate their business in industrial clusters or areas due to the amenities and infrastructure already available from before.

·       Free trade zones - International free trade fair centres and trade zones are also good areas to locate your business as it generally receives wide publicity and is accessible.

The choice of location not affects your day to day operations and staff’s confidence, but also your brand image.

Folk Ballads associated with Renting a Property

There is always a debate between the advantages of owning a house vs. renting, and there are much advantages and disadvantages with both.

You need to dismiss certain myths attached with them:

·     My roommate suddenly went and there is no way I will cover her rent–A tenant is someone who has a written tenancy agreement with the landlord and is responsible to the landlord for the whole rent. But flatmates are different; they are not part of the tenancy agreement. They are responsible to the tenant for their share of the rent. If you are the tenant and your flatmate is gone, you are responsible for paying their share of the rent.

· The landlord is selling the house I am renting for. He cannot do that - He can. If he and his family members are moving into the house, he will only give you 42 days’ notice to move out according to the Residential Tenancies Act.

·  Property tax myths –A renter does not pay property taxes directly but a part of his rent includes it as landlords factor all of their carrying costs into determining their rental charges. The benefit of owning a house is that taxes generally are deductible but renters cannot subtract these types of taxes.

·  Investment myths - Homeowners have huge costs attached to their mortgage than renters have with their rent, but tenants do not take these savings and apply them to investments. During tough financial circumstances, renters take the savings and spend it on other necessities.

The decision to rent is complex and depends on many factors. For those not intending to buy a house for long, rent makes more sense.

Making Your Property more Valuable

Is there any way to make your property more valuable? Let us try to understand:

1.    Early to Start more to sell

Even if you’re just living in the house and have no plans for real estate market yet, planning early is what will give you good profits in future. Every decision related to your house must go through the thoughts for its value. Keep doing regular upgrades, necessary repairs, and additional enhancements that, over the time,help you increase the property’s value.

2.    Plan Your Moves

Before making any changes or repairs that you may find necessary, try to know how to make it in favor of your property’s value. Some changes are good for the property while other are just financial damages.

3.    Furnishing

      Home Furnishings are equally important. Just like other enhancements furnishing too need to be planned over the time. In fact, improving the furnishings regularly will keep you ready for the market all the time. 

4.      Every Detail Matters
Be attentive to every detail. Don’t take too much work at a time. It is better to consider one block at the moment. For example, if you’re thinking about painting, it is not necessary to paint the whole house at once. There might be some points that need more attention than other so first go for them. This is not only an effective but a wallet-friendly way to increase the property value.

Hence the key lies in starting early and being vigilant about what’s important and thus making right decisions.

Accounting in Real Estate and Outsourcing Services

A successful business owes to a lot of various aspects that bring it together to the heights it reaches. One of them is the accounting. A dedicated team of workers knowing their way with the business numbers is what keeps its backbone straight and sturdy. Larger the business is, more work effort it needs to dedicate towards the accounting. And when it comes to a large

market like Real estate, a few extra hands are always helpful. Real Estate firms need to be tight on their numbers all the times to stay in the competition. While, there are some big companies who have turned towards software for the accounting process, a lot more is required to bring the load down.

The problem lies in a large amount of accounting that a Real Estate firm has to deal with. In addition to the records related to financial transactions, it includes many more points like balance sheet, bookkeeping, machinery bills etc. And handling all this is not only requires specific skill but a large workforce too.

That is what calls for the Outsourcing companies in the picture. There is a surprisingly large amount of outsourcing companies around the world both online as well as offline capable of providing the required workforce for the purpose of accounting.

What’s even more surprising is the cost that the companies need to pay to the employee the services from these companies. Most of the companies being from the countries with low labor charges come really affordable to their employers.

Outsourcing companies are thus a good option for providing an efficient and economical accounting for the real estate firms.

Buy or Rent: Make your Choice

The one dilemma a buyer faces particularly in the residential real estate market is whether to buy the place or save a few bucks for now and rent it. And money might not be the only decision for this conflict. Let us try to understand and help the buyers:

Visualize your Dream

You must know what you’re looking for. It may be a neighborhood

or a specific locality that you might be looking for and based on that, you should be choosing to buy what you found or rent it for a while.

Nearby Café or Customize Bedroom

Another decision that you need to make is about your priorities. Are you looking for reliable facilities like hospital, café or gym etc. or you’re more interested in customizing the place according to yourself? While the former can only be afforded by renting, the latter requires you to buy the place.

Is that it…yet?
Renting gives you the flexibility to keep moving as long as you don’t find the one place you’d like to live in permanently. But having that said, let us assume you go for renting and tomorrow your land lord comes goes all nuts and asks you to raise the rent or leave the place, what would you do? This is the kind of instability that asks for buying a place of your own as soon as possible.

Ultimately, buying or renting is a personal decision. The points above can help you weigh your priorities but the final decision still stays with you.

Important terms for CRE Brokers

However there is a large glossary including all the technical real estate terms and compressing it for just the ones used for commercial property isn’t at all helpful, there are some specific terms that a CRE Broker must know to provide better service to his clients:

·         Common Area Maintenance:There are some areas in the property liable for maintenance to both the owner as well as the tenant. The maintenance charge of these areas is to be borne by both the parties. This is known as the common area maintenance. And Broker needs to negotiate this for either of them.

·         Capitalization rate:Commercial properties are all about profits and returns. To ensure that, the broker needs to know the value of a property as calculated by what is known as the capitalization rate.

·         Escalation Clause:This is again a term broker needs to know about. As per this clause, the buyer needs to make an offer better than the already highest bidder but still lower than the escalation cap. This clause is kept in the contract to maintain the value of the house even after a long term contract.

Tips for Commercial Real Estate Investors

Investments in commercial properties have their own perks. Better market income, good price, and budding start-ups are just a few points among much more that attract the investors on this side. So, here are some guidelines to help you make a profitable deal in commercial property investment

•  Do your Homework

It is one thing to invest in residential properties and a totally different venture to go for commercial ones. Here, the income is based on per square feet usability of the land. Higher cash flow than residential properties and longer leases are some other differences. Furthermore, the down expected by the lenders in commercial properties is higher.

• Have a Sharp Eye 

If you can walk away from a deal, you have it in control. Have good inspection about any mandatory repairs, damages etc. Having knowledge of this gives you and upper hand in the negotiation. Moreover, risk assessment in the investment is also equally important.

•      Know the Terminology

           Some common word used in commercial real estate for metric purposes      like, Capitalization (Cap) Rate, Net Operating Income, Cash On Cash etc.

• .      Finding Sellers

Always go for the ones desperate to sell below the market value of the property. The more pressing reason is for the seller, the better deal you’ll make.

• Check out the Neighbourhood

Nothing is more informative about a property than its neighbourhood. Enquiring about the property from the neighbouring owners is a smart move.

Thus, a well strategized investment in commercial real estate can earn you fortune while a small carelessness can cost you the same.

What happens when you buy a property without Realtor ?

When it is about buying a house, paying the realtor’s commission becomes an extra burden on the buyer. So he takes the risk of doing the transactions without a realtor.

Pros of buying without Realtor:

·       No mediator to deal with –Communicate directly; your thoughts offers, and needs with the seller. No need to wait for call backs, messages and reply that your requirements are well expressed to the seller.

·       Be flexible in purchase price – A buyer has to give 5% commission to the realtor after he or she purchases a property. Forgoing him you can save your currency.

·       You gain supremacy over negotiations– Implementing your own marketing ideas makes it flexible to negotiate with the buyers.

Cons of buying without Realtor:

·       Lots of questions and paperwork to be done – The Federal Nation Mortgage Association recommends for a realtor. He advises over securing your finances and cleaning up your credits.

·       Property history is unknown –It is found that after buying a home, you get to know that it was used as ‘meth lab’. This fact is not disclosed mostly.

·       Hidden costs may linger – Youwon’tknow about the pros and cons of the neighboring area if it will cost high for maintenance.

How to buy a home without a Realtor?

·       Start surf lists and keep a record of the information gathered.

·       Get a pre-approved loan for a mortgage.

·       After choosing, compare your property with similar ones in the area.

·       Write an offer letter to the seller about how much you are willing to pay.

·       Start site visit for proper insight.

HOW A LAND SURVEYOR CAN HELP YOU BUYING GOOD PROPERTY?

You might have inspected the property. You might have already made up your mind about buying it, but before that it might be a good idea to have a Land Survey Report for the property. Technically, land Surveying is a process of measuring and mapping the land and its surrounding environment using some mathematics, latest technology and equipment. Here are a few reason how a land surveyor might assist you in buying property:

PICKS THE BEST FOR YOU- Not only the measurement but there’s much more that a land surveyor possesses the knowledge about. Points like soil quality, water, drain, and manhole covers etc. that might affect the quality of the land where the property is. In addition to that they also give you an idea about the area where the property is.

THE RIGHT PRICE:-A surveyor is a guy with actual facts. Based on these facts he can help you knowing the true cost of the land. They can also help you negotiate the deal.

THE TECHIE PART:-Nowadays surveyors are equipped with latest technology namely 3D laser scanning and robotic machine for soil testing etc. This helps them providing more accurate report of the land

KNOW YOUR BOUNDARIES: Before buying the property, you must be aware of its legal geographical boundaries. The land surveyor helps you in providing the exact property boundaries that helps you avoid any legal disputes.

Therefore, a land surveyor can give you a very accurate idea about the property you’re about to buy and thus assists you in your decision.