The Buying Commercial Properties Cheat Sheet
Before you decide to start buying commercial real estate, it is advisable to have a grasp of real estate terminology as applied to commercial property. The information below provides you with some terms which are used and My Page some have a brief explanation for the purpose of being successful.
Class - This usually applies to office property and gives the buyer and indication of what he can expect before he actually visits the property. For instance, Class A commercial real-estate could be of modern build, less than thirty years old, probably five floors or more in a central location close to all amenities and transport links. This really is the sort of property that many organisations are prepared to rent at good rates so an ideal choice for the professional commercial real estate investor.
Pre-Let Property - As the name implies, they are properties sold through an existing tenant, usually blue chip, with a guarantee of a long lease with regular rent reviews inbuilt. These properties mean that you could start receiving a return from Day 1 rather than having to locate tenants once purchased.
Vacant Property - By buying empty property, you may maximise the rental income rather than be in a previous lease, however the down side is that you may need to search out the tenant after the property has been bought. Prospective tenants can be shown the property throughout the purchase process and even sign a letter of intent to rent, but you should not sign them to a lease until you own the property.
The third sort of property that you may purchase can best be summed up as REFURBISHMENT PROPERTY where you buy a property and then do either major or minor works on the property to meet the needs of your prospective tenants. One example would be a big retail space that you then break up into smaller units and rent out to smaller specialised fashion or antique businesses.
Real-estate Appraisers - These are crucial people when you are buying a property as they will set the valuation for the sale and as a consequence for your mortgage. Wherever possible, you should try and meet them on the site to ensure that you may point out the bad things, in case you are buying, or all the good points, in the event you are selling.
When you can expect, you will find hundreds of terms used both in residential and commercial real estate investment and you will come across many new ones as your property investment profession continues. I have tried to give a few here that could help and I hope the information is useful.
