Commercial Real Estate Investing Overview
Prior to deciding to start buying commercial real-estate, it's a good idea to possess a grasp of real-estate terminology as applied to commercial property. The information below gives you some terms that can be used and some have a brief explanation with regard to being successful.
Class - This usually applies to office property and gives the buyer and indication of what he may anticipate before he actually visits the property. For example, Highly recommended Reading Class A commercial real-estate could be of modern build, less than 30 years old, probably five floors or more in a central location close to all amenities and transport links. This 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 by having an existing tenant, usually blue chip, with an assurance of a long lease with regular rent reviews inbuilt. These properties mean that one can start obtaining a return from Day 1 rather than having to search out tenants once purchased.
Vacant Property - By purchasing empty property, you can maximise the rental income rather than be in a previous lease, though the down side is that you may need to seek out the tenant once the property has been bought. Prospective tenants may be shown the property during the purchase process and even sign a letter of intent to rent, but you shouldn't sign them to a lease until you own the property.
The third sort of property that one can purchase can best be summed up as REFURBISHMENT PROPERTY in which you buy a property and after that do either major or minor works on the property to meet the needs of your prospective tenants. One example will be a large 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 essential people when you are buying a property because they will set the valuation for the sale and so for your mortgage. Wherever possible, you should try and meet them on the site to ensure that you can point out the bad things, if you're buying, or all of the good points, if you are selling.
When you may anticipate, there are hundreds of terms used both in residential and commercial real-estate investment and you will come across lots of new ones as your property investment profession continues. I have tried to give several here that may help and I hope the information is useful.
