Probably most of you are informed about the nature of commercial real estate appraisal, but the fact that some of us are ignorant of what the commercial real estate appraisal is all about, the need for thorough explanation about this matter must be given attention.
So for that reason, I would like to discuss some important considerations about the nature of commercial real estate appraisal. Just remember that this information is just some of the fundamentals for a successful commercial real estate appraisal.
According to many resources, the commercial real estate appraisal is just like some forms of home appraisals that most of the people need when buying or selling a home. For that alone, the commercial real estate appraisal is therefore an estimate of the value of the commercial real estate property. It is important to note that the commercial real estate appraisal is not just done by any person, but the commercial real estate appraisal is performed by a qualified and certified professional called an appraiser. Along with that fact, the commercial real estate appraisal is generally recognized with one of three approaches, which include a cost approach, a comparison approach, and an income approach.
With a cost approach of commercial real estate appraisal, the appraiser investigates what would be the cost for a replacement or improvement of the commercial real estate as of the date of the commercial real estate appraisal. In the sense of the second approach of commercial real estate appraisal which is the comparison approach, the appraiser in this sense of commercial real estate appraisal approach really make some comparisons with the value among other commercial real estate properties of the same size, quality, and location that has been currently sold. On the other, the use of the commercial real estate appraisal’s third approach, which is the income approach of commercial real estate appraisal, the appraiser then identifies the value of the commercial real estate property based on the estimate of what an investor would pay with respect to the net income that the commercial real estate property contributes. Nevertheless, the income approach of the commercial real estate appraisal is said to be only available for income producing commercial real estate properties.
Finally, the commercial real estate appraisal will be only made successful if the commercial real estate appraisal includes the estimate value, the effective date of the appraisal, the purpose of the appraisal, the identification of the commercial real estate property and its ownership. Aside from that, the commercial real estate appraisal must also include the condition of the neighborhood, factual data, qualifying conditions, analysis and interpretation of the data and the assumptions made the processing of the data by a single or more of the three approaches to commercial real estate appraisal to value and the certification and the signature. Such considerations must be given attention when doing a commercial real estate appraisal for the benefit of the parties involved in the commercial real estate appraisal.
Commercial real estate is a hot commodity right now. Many investors are seeing the massive potential for income associated with this type of property. It is not always clear, however, what type of commercial real estate to invest in or what part of the country to choose. With a little research, you can find the perfect location to purchase.
Columbus, Ohio is a great location for commercial real estate. Columbus is the capital city of Ohio and also one of the fastest growing. All over Columbus, new businesses are popping up and with them the need for commercial spaces. There are several notable commercial real estate companies working in the Columbus area to help people find the perfect space for them.
Another great area is Greensboro, NC. It is a growing community with great historical roots. It was once known as the Frontier Town for those looking to go west. With it’s temperate climate and friendly southern atmosphere, Greensboro is a town that attracts people from all walks of life. There are also many great commercial real estate companies, such as Kotis Properties, to help clients find their dream location. And with the attractive cost of living compared to many other parts of the country, this area will continue to flourish.
Austin, Texas also is a good investment for those interested in commercial real estate. Austin is a hot spot for families and singles. There is a growing economy and a great location. This makes Austin a good investment commercially. There are many good real estate companies in Austin. The Austin based COMMREX is one of the top commercial real estate firms. There are also some major national companies headquartered in and around Austin.
Los Angeles is one of the greatest markets for commercial real estate investors. Although it is one of the most expensive, the property values are ever increasing. Owning property in LA is like having money in the bank. There are significant advantages to owning in LA. One of the great tax benefits is that if you sell your home, you can take a profit exemption as long as you live in your commercial property for at least two of the five years following the sale of your property. This, along with the potential for income, is a great drawing card for LA commercial real estate.
Commercial real estate is a great investment. It appreciates significantly year over year, so the resale is excellent. If you decide not to sell or use it yourself, you can lease it and gather continuous income. Whether you use a firm in person or over the internet, be sure to do some research about the area first. When purchasing property, look for location. This is truly the key to finding the perfect commercial real estate investment.
If you are looking for a commercial property loan, and it is your first time getting commercial real estate financing, you are in for some big surprises. This is a whole different deal from borrowing to buy a home.
One of the biggest differences is that you have to do more to convince the lender that this is a good deal for them. Commercial real estate financiers are going to be looking hard at what you can offer them as a borrower. They may ask lots of specific questions about the nature of your business, your plans for the money, and other things that may not seem to be related to the matter at hand. Since dealing with lenders is more complicated with commercial real estate, let’s have a look at who might be lending you the money.
Lenders for commercial real estate financing include banks, savings and loans institutions, insurance companies, mortgage brokerage firms and private lenders.
Which kind of lender is best? Of course there is no single fit for every situation, and any of the above could offer you a great deal with good interest rates.
What you should really be worried about is the loan officer, more than the actual lending institution. It is the loan officer’s work that will ultimately make the lending process either go smoothly or not.
When choosing a loan officer, look for someone with good experience. The best place to find an experienced professional is through your realtor. They will usually have one they have used in the past, whose work they have always been happy with.
There are also certain lenders who specialize in specific business types. For example, some specialize in financing warehouses; some specialize in office real estate. This can be a great advantage.
With commercial real estate financing, lenders want to know everything they can about the place you are buying or refinancing. So that you won’t be surprised at some of the questions, some typical ones follow.
The income the property has been making. They will want to see income statements and expense statements. This might be the #1 consideration, more even than your income.
They’ll want to know about the owners of the property. You’ll have to provide financial statements for all the people who own the business.
You may have to provide information about the managers or whoever will be running the place. Because they are concerned with a return on their investment, they want to know that the business will be run by competent, experienced managers.
They will definitely check the borrower’s credit history. This will be a less important factor than the financial history of the property, but it can still be a deciding factor in whether or not you get the loan.
The lender will want to know how much the property is worth, according to an official appraisal.
You should tell them about any plans you have for building or changing the property in any way. For example, if you plan to do any construction, they will want to know that.
When dealing with lenders, always remember that risk is the #1 consideration for them. While you’re building or improving your business, and you’re thinking about all the great things coming your way, all they are thinking about is the possibility of failure. To them, it’s just a matter of whether they will get the money back or not.
You can find commercial real estate financing, just look for a good loan officer, and be prepared to provide whatever information they request from you.
The field of commercial real estate has been experiencing an increase in the demand of people looking for an affordable place in which to do business. Since not everyone is able to afford to invest in commercial real estate, they are looking at their options in leasing. A landlord will need commercial real estate landlord representation to assist in dealing with prospective tenants as well as effectively placing the real estate on the market.
Leasing a commercial real estate property requires a lot of research and planning to be accomplished, as well as a lot of leg work in interviewing prospective clients and tenants. Commercial real estate is quite different from a residential real estate. It entails more requirements to consider, as well as selecting the right business for your property. Having quality real estate landlord representation will definitely help in screening those businesses and tenants for your real estate.
With a real estate landlord representative, the marketing of your commercial real estate property will be much easier than if the landlord took on this challenge themselves. A professional representative will assist you in planning your marketing strategy to ensure that your real estate gets the widest exposure, featuring its good points and characteristics. They will also help in the formulation of your marketing plan as well as assist in preparing the things you will need to post your real estate in print media and in websites. A good commercial real estate representative should also have a database of potential clients that the landlord would not have access to. Because of this wide coverage, you will be able to find tenants not only locally but in neighboring regions and even on a national level. A wider range of prospects means a better deal for your real estate.
Your real estate landlord representative will help you project the maximum net income that you can get on the operation of your commercial real estate. This means that they will help you choose the business tenant that will provide you a risk free rental as well as the highest rental price offer. You may also be included in the community meetings of real estate brokers as well as receive updates from your agent. They can also present to you a marketing goal plan that you can follow to achieve maximum utilization of your property.
Another job that a commercial real estate property representative will gladly do for you is to set the qualifications for potential tenants. This is to ensure that the tenants that you will be getting are serious ones with the ability to follow through with a leasing contract on your property and are not a waste of time and energy. They will also help in conducting interviews on those potential clients to screen out those that may be too high of a risk, and find those tenants that offer the highest potential of staying in the space.
Real estate properties are great investment opportunities especially if they are maximized and used properly. To ensure that you are getting what you deserve for your real estate property, then get real estate landlord representation. A good representative will gladly help you through the ups and downs of commercial real estate market and will help protect your investment for you.
If the idea of investing in Commercial Real Estate appeals to you, then maybe you can take the first step towards doing so by investing in your education. You see, to understand the value of the Commercial Real Estate around you, you need to know the ins and outs of Commercial Real Estate and real estate investment. This will help you avoid money pit investing so that you wind up with a quality Commercial Real Estate investment that will appreciate in worth over time.
The first thing you really have to understand about investing in the right Commercial Real Estate is that it is really possible to do so. Despite what many naysayers may have been telling you, Commercial Real Estate investment is a good one. Even in today’s declining US housing market, or residential real estate, the commercial market has not seen the decline in value that the residential market has. Commercial investors are typically smarter and don’t make the emotional’ moves that a residential investor might make. So as a result, the commercial real estate did not experience the false appreciation that housing saw.
Second, don’t let fear get in the way of sound Commercial Real Estate investing. Once you have been educated in what you have to look for in quality structures, use your inner voice to let you know which ones are good to buy within your investment budget. Then combine that inner voice with good, sound research. Quality research can help show you which investments are more likely to be winners, which ones are just so-so, and which ones will never amount to anything unless you tear them down and start over.
One more important step is to make financial plans for the long-term. This means that you should anticipate your financial goals as mini-steps that you have to pursue step by step until you see the bigger financial picture unfolding before you. You won’t feel so intimidated about pursuing investments if you understand what you are doing first.
If you are new to commercial real estate investment, it would be a wise choice to hire someone who understands it, and has been around. A good commercial real estate investment broker can greatly increase the potential for success in your investment. You, as the buyer/investor, should be represented by a professional. The seller most likely will be, so make sure you’ve got a team on your side.