Buy A Commercial Property
Get Rich Fast – Be A Successful Commercial Property Investor
Just what is commercial real estate?
- It’s office building – skyscrapers down to a small building
- Apartment buildings with five or more units stores, whether they’re in big malls or small, local shopping centres
- Hotels and restaurants
- Industrial space – factories, warehouses etc.
Investing in commercial property requires careful planning. You need to know the reasons of your Investments, are you investing, to Flip a commercial property to pocket a sizable profit margin fast? Or, do you prefer to Hold And Sell? These are some basic questions you need to answer. Flipping a property is a supersonic option on generating wealth, rather than the Hold And Sell option. It’s important to know more about the commercial property you are likely to invest, a few points you may need to know and consider before investing your funds.
Investments Size
An important factor, this marks the size of your investments you are planning, back calculating the finances you require to borrow from a financial institution or bank, (This may be, in case, limited funds are available through your own source). There is nothing like to have your own funds, as these increases and boost your profit margins at the end. The other important reason is you sleep in peace, and don’t worry about sharing interests, paying up the credit loan or profits with an external source.
Location Of Property
Property is all about location & only location. Details of the commercial property are of vital importance, this gives an investor a true picture of the investments he proposes to make, is it worth the Investment? There may be a situation where the neighbourhood is still being developed. An imaginary view of the nature of developments taking place like, industrial belt in the area, major road, express freeways, metros stations railways or airport distance, hotels, shopping centres, residential development etc gives an investor an over view of the value of the property in coming times. As an investor, it is also worthwhile to view the past development in the adjoining areas, this gives an idea of how fast is the development taking shape.
Details Of The Developer
An investor may be buying a commercial property from a developer or an individual through second sales, in either of the situations a firsthand knowledge of the developer, his past business trading history, the past projects developed, and the quality of construction would give an investor a fair idea of how safe are the investments. A point to remember, while investing is to know who are you putting your funds with, it is worthwhile to conduct a survey, of the units which are available for sales and at what rates. A working knowledge of the demand and supply of the property in the local market is important and helps taking decisions on investments.
Details of the Seller
Should you be investing in a commercial property available through second sale, knowing the seller is important, this would give you an inside details of why is the seller putting up the Property For Sale. There can be many reasons for a seller to put his property for sale, some of them are:
- Out stationed owner
- No one to look after the property
- Need of immediate finances
- Family property division
- Seller is relocating
- Investing in another property and is looking for funds
The list can carry on and on, however there might be a possibility to get a good deal which is below the present market price. As an investor you need to buy property at least 20% – 25 % below the market rates, this will help you get rich faster.
Property Documents
A quick check of the property documents would, give an investor a neat idea about the legal aspects, mortgage, loans, and ownership details, the actual size and dimensions, carpet area and the supper built up area, exact location of the property, this is in case of a second sale. Should you be buying a property through the developer, a thorough investigation of the development, land titles, if the land is under mortgage, property layout plans, open and green space areas, common facilities, completion and handing over time frame, approvals and sanctions form the local and civic governing bodies etc are important.
Price Valuation
The thumb rule in property investment is “Buy Low And Sell High” this equation is important in investments. Arriving, at a confirmed price is important for an investor, as a forecast on profits and margins, operational costs, etc can be back calculated. To check back on the price value demanded, a deeper study and analysis of the same kind of property in the neighbourhood, across the road or in the surrounding areas will give a confirmed current local market price index, a quick call to your local property consultant, would be use full to get an inside working knowledge of the market, a cross references check with friends and relations would also help you to take firm decisions. It’s only after this exercise, you would know, whether to ask for a discount, or grab the offer.
Flip It Or Hold?
An investor is always on the lookout to pocket the profits as soon as possible, and there is nothing wrong with this, the question now is how much? Should the expectations be more than what you get today, then hold on and sell your property? It is going to appreciate over a period of time, or maybe you would like to lease up your commercial space and then flip it for a fatter profit margin. The final decision is yours.
About the Author
The author is a commercial property investor and broker based in Gurgaon, (Delhi NCR) – INDIA, the author offers commercial property investment and consulting services, sales & leasing. If you have any quarries related to commercial property you are requested to contact us.
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