Commercial Real Estate and Real Estate finance
Why do people buy commercial real estate? Owning rental real estate, whether a house, duplex, or larger apartment building is the entry for most investors and the easiest to understand.
Values generally follow return on investment and appreciation over time. The owner can be an individual, coulee, family, or non-personal entity such as a Limited Liability Company or Corporation.
Sometimes a person inherits a home upon the demise of a relative and decides to hold it for income. Other times it is an investment for the future or an opportunity to take an under-preforming asset and fix it up, physically or financially.
Either way, real estate is often less risky than the stock market. Bear in mind that return is a factor of risk. A property located in a prime location will sell for a lower return because it bears less risk. For instance, a house next to a busy highway or other impediments will sell for less and return a better return in the relationship of rent to value than the same house in a better location.
Other times a property may be in need of rehabilitation, maybe a simple as paint or as severe as a bed foundation. Anything that influences desirability, influences value and price.
Many commercial properties are not marketed like houses, in a local Multiple Listing Service (MLS). The best way to become aware of these properties is through a Commercial Real Estate Brokerage. While commercial is a specialty, a savvy professional can assist a buyer or seller.
In almost all cases, the Seller of a property pays real estate commissions. As a Buyer, usually, you pay nothing. On the other hand, a smart buyer preforms due diligence, meaning that they hire specialists to thoroughly investigate the condition of the property and the use that it may be put to. Property is zoned in several ways and not all parcels support commercial use.
I have had recent experience selling and financing investment property and am happy to get into as much detail as you wish. Call or write and I’ll do my best to guide you.
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