Tweet

Commercial Property: 10 things not to do

Written by: Benjamin Jones

Article Overview: Commercial Property is a low entry market, that is unqualified buyers enter and exit. Jones Commercial has put together 10 things not to do to help those new to the market be successful.

Commercial Property: 10 things not to do

1) Don’t rush your decision. If you are uncertain about anything seek impartial advice to reassure yourself. It is better to lose an opportunity but live to fight another day than be stuck with a bad property.

2) Don’t purchase a property based on what it looks like or the general market opinion of the property. Focus on the numbers and get impartial advice (such as a LIM), if these don’t stack up then don not buy.

3) Don’t over extend yourself. Keep your risk manageable.

4) Don’t become greedy and apply unreasonable pressure on your tenant(s). Owners who try to increase the rent to unreasonable levels or interfere with the tenants livelihood dramatically increase the likelihood of their tenant leaving for greener pastures and severely compromising their investment. As commercial properties draw a lot of their value from the leases in place (length of lease, amount $ per year, quality of tenant) you are playing russian roulette if you apply too much pressure on your tenant and inevitably you run the risk that you may lose them. My advice is to be firm but fair and think long term.

5) Don’t purchase the property and then walk away. You should regularly drive past and/or inspect the property. Keeping tabs on your investment is a must.

6) Don’t unreasonably refuse to sell your property. Treat commercial property as an investment and not a showpiece, if an offer is too good to refuse then don’t refuse! Too often owners are caught up in the emotional aspect of owning property and miss out on amazing offers only to regret passing over that offer at a later date. Commercial property investment is all about the returns.

7) Don’t abandon the property after purchase. Pride of ownership is one of the best ways to build and maintain value. Properties that are looked after, upgraded and maintained properly deliver this in spades. If an owner is proud of the property and looks after it, this is immediately evident to prospective purchasers and creates desire.

8) Don’t be inflexible and/or ignorant. You may perceive the value of a property to 20% higher than the current market rate, it is important that you listen to the market feedback and determine whether or not you wish to sell the property.

9) Don’t decide to sell the property on a whim. Determine your motivation and then act accordingly. If your motivation to sell is due to interest rates reaching crippling levels or another investment opportunity becoming available then act accordingly based on the circumstances. If you are just waiting for an amazing offer to fall into your lap then be prepared for the long haul.

10) Don’t dismiss methods of sale or lease. There are a number of ways to sell / lease a property and each method has various strengths and weaknesses, it is about determining which method best suits your property and what you want to achieve. For example number of people object to auctioning their property based on false presumptions and without actually understanding how an auction works. An auction with a reserve is actually a method of sale that is completely geared in the vendor’s favour. By forcing purchasers to compete against one another in the same room ensures top dollar for your property if the auction campaign is conducted properly. Bayley’s and their Total Property Auction campaigns are one of the best exponents of securing the best market price available for their vendor’s.

Related Articles
  Employing A UK Commercial Mortgage Broker
  Commercial Property: 10 things to do
  Buy to Let Commercial Mortgages
  Buying a property for your business
  Commercial Mortgage Financing Canada –

Article Tags: commercial property investment, desire, emotional aspect, greener pastures, impartial advice, leases, likelihood, lim, livelihood, playing russian roulette, pride, property focus, prospective purchasers, risk, showpiece, spades, stack, tabs, unreasonable pressure



Related Forum Posts
Re: Graphic Design Resources - [quote="Commercial Realtor":dyndmpwj]I'll try GIMP. We took a family trip to Hawaii and did the LOST TV Series tour. I want to include some cast members in our photos.[/quote:dyndmpwj] Let us know how you got on with it. I have heard only good things about GIMP.
Re: FaceBook - [quote="Commercial Realtor":280x2qdf]Pay Per Click ads can get the ball rolling.[/quote:280x2qdf] If you are going to go the PPC route you might as well use Facebook ads. That way, at least everybody who looks at the ad will already be a potential user! Also, you set up tight market segments to target.
Re: Ideas For Business - Lucy, Visit ttc.ca for info on the Vendor license to operate on TTC Property only. If you plan on not operating on TTC property you will not need this. I would recommend Nathan Philips on Friday afternoons to catch the Lunch time crowd - Tell me when you plan on performing - I will attend as i work right beside Nathan Philips. I forgot about Yonge/Dundas Square - This place is packed everyday during lunch and after work hours. I can attend to watch you there 'cos I work close to that area as well.
Re: Invest in Real Estate or Stocks? - [quote="Commercial Realtor":1be3urw5]You can consider investing in Real Estate Investment Trusts (REITs). Buy and sell shares like stocks so they are easy to buy and sell, diversify and management is included.[/quote:1be3urw5] That sounds good, but I think that whatever one invests in today, you need to do your due diligence beforehand and keep on top of what is happening with your investment at all times. MichelleJ
Re: Unsecured Lines of Credit - Hello, creditguru: Thanks for the recommendation. Here are two questions for you that will further help our forum members to make use of your suggestion: 1. How [u:p6n6npsx]does[/u:p6n6npsx] a business establish a strong business credit profile? (Especially small business and home business.) Please provide some tips or guidelines on how to do this effectively. 2. Commercial credit lines can be helpful to a business, but they do require responsible management on the part of the business owner. What tips, recommendations or cautions can you offer to business owners who are considering commercial lines of credit? Thanks. GT :-]


Share this article with your friends. Fund someone's dream.

Leave a comment below or share on the left and you'll help support entrepreneurs in Africa through our partnership with Kiva. Over $50,000 raised and counting - Please keep sharing! Learn more.

Tweet

Newsletter

Get advice & tips from famous business
owners, new articles by entrepreneur
experts, my latest website updates, &
special sneak peaks at what's to come!

Name:
Email:

Popular Articles

How to Ask for a Flexible Work Arrangement

Marketing & Sales tools – going back to basics

Work at home Opportunities for the Disabled

Suggestions

Email us your ideas on how to make our
website more valuable! Thank you Sharon
from Toronto Salsa Lessons / Classes for
your suggestions to make the newsletter
look like the website and profile younger
entrepreneurs like Jennifer Lopez.