4 Effective Steps to Find Commercial Rental Properties for Sale
Commercial real estate investing is a big decision. No one ever said it was for the risk-adverse; that’s for sure! Fortunately, commercial rental properties for sale typically offer a great return on investment over the long haul. You just need to know where to begin! Below we’ve outlined the four effective steps to uncover a profitable rental property available on the market.
1.) Research the Areas You’re Considering
Before searching the market for rental properties for sale, start by performing basic research on the areas in which you are interested. The following list outlines some of the most essential points to consider. Once you focus in on these criteria, you will have a better understanding as to where you want to begin your commercial property search.
- Quality of the neighborhood
- Quality of the schools
- Crime rate
- Property taxes in the area
- Employment opportunities
- Local amenities
- Opportunities for future development and zoning
- Average prices of comparable rental properties available in the area
- Average price of rent in the area
- Amount of listings and vacancies in the area
- Insurance costs in the area
2.) Search Quality Sites for Commercial Rental Properties for Sale
There are thousands of commercial real estate listing sites online, but not all of them are created equally. Below we’ve listed the top ten players.
3.) Calculate the Expenses Involved with Rental Property Ownership
Now that you have (hopefully) found a few ideal commercial rental properties for sale, it’s time to crunch the numbers. Even though the properties you found may seem within your budget, the additional expenses may push your cost far over the line. You might have a notion as to what the local property taxes might be, but have you considered other factors – such mortgage and the utilities needed to keep your property running? You may also have to hire a property management company to handle the day-to-day tasks of your property. Investing in commercial real estate is more than just making the purchase. You want to be certain that you weigh the dollars and cents to make sure that, in the end, everything makes logical sense.
Consider these costs typically associated with commercial rental property investment:
- Mortgage rates
- Rental property insurance
- Property management fees
- Maintenance costs
- Association fees
- Utilities, such as gas and electric
- Vacancy allowance
- Cost of property listings and tenant search
4.) Before Signing the Dotted Line, Visit the Property… Again and Again
As you may have realized from the items above, commercial rental properties for sale may look perfect on paper; however, they may not be ideal for your needs, goals, and budget. Below are a few tips that you should follow before you sign on the dotted line.
- Visit the property several times, on different days, and at different times throughout the day. Your serene street may be an absolute nightmare at rush hour. Maybe the street parking looks like there are more than enough spaces, but a meeting across the street twice per week may fill it up. Any or all of these potential issues can determine whether you have an effective rental property.
- Speak with current tenants (if any), as well as owners and tenants in neighboring properties. Find out how they feel about the area, your prospective property, and other neighboring properties.
- Bring a friend, family member, or close colleague with you to the commercial rental properties for sale that you’re interested in. This carries with it a number of benefits. The first benefit is that you won’t necessarily be focused on every minute detail at such an early stage. Instead, you’ll be looking at the overall condition, space, and layout, and envisioning any upgrades you may want to make. You may even imagine yourself as the owner and get excited about it. Having someone along for the ride may help you maintain some perspective in how you approach the property. They may also see things that you have missed because they aren’t emotionally attached. Also, if you’re dealing directly with the property owners, rather than property management companies, it’s simply safer to have another person with you. You can never be too careful.
It’s not always easy to find the right commercial rental property; however, if you take your time, do your research, and ask for help when you need it, you should be able to find the right place.
OR… Hire a Trusted Commercial Real Estate Brokerage to Help You Every Step of the Way
Instead of performing your own research, property search, site visits, and negotiations, hire a commercial real estate brokerage. Many problems that you might face by attempting to find and engage commercial rental properties for sale on your own can be solved by having an experienced broker at your side. A commercial broker can help you navigate through the common (and not so common) obstacles that arise during commercial real estate transactions. They can help you determine an ideal location, narrow your search, ensure you’re getting a good deal, and help negotiate the fine details. A qualified commercial broker can help make the process easier and better for you.
Purchasing commercial real estate is only the first step in the process. Once you make the decision to invest – you have a long road ahead of you. Our experienced brokers at The Robert Weiler Company believe that no one should have to tackle a commercial real estate investment alone. We can be a valuable partner when it comes to searching for and finding profitable commercial rental properties for sale. Speak with a commercial broker today by calling 614-221-4286. Also inquire about our property management services.