If it will, at commercial real estate investments, investors often know what type of real estate, you should invest in this article, about 5 groups of buildings and the reasons why you should or should not be considered.
1. Land: people who invest in waste places, often in the hope of buying farmland adjacent commercial land to a few thousand dollars per hectare. Dream of their fate is again in the near future to commercial zonesWorth hundreds of thousands of dollars or more per hectare. They often try to convince people to invest in undeveloped land, sell the dream. Even if this dream is really happening, as you can hit the jackpot in Las Vegas, the reality is, most investors lose money or get the return on the investment real estate. This is a very risky investment that generates no land or very little income. Regarding the taxes, the country is not so reduced that you can not claim any depreciation. On topthat the interest rate on loans the country is very steep compared to other types of commercial real estate. So every month, you need to find money to pay the mortgage, while reaping none. Should invest in land which
- Develop expertise so that you can not convert the land treated in a shopping center.
- You know exactly what you are doing and their deep pockets.
- The ownership of the land of a shopping center, you (not the owner of the building).
2. Apartments: whatis a tower of investment management-intensive than the level is high. The leases are short, often referred to one year from month to month. As a tenant in and out, you have to spend money to get ready for the device. Apartment tenants tend to be a history of delays in the other tenants have because they are more likely to have a limited budget. If you do not like dealing with a headache most of the tenants, you probably want to stay away from the apartments. The key to the apartment of successInvestments
- Control or reduce costs. This may be a trivial task to the list of expenses that appear to the caretaker intended display. These expenses: advertising, accounting, banking fees (because of insufficient funds), capital improvements, corner of Grant laundry, cleaning, costs of collection, trash removal, insurance, il), landscape architecture legal (eviction, maintenance, asset management, off-site property management on the ground, pest control, painting,Repair, scan, security, property taxes, utilities and water.
- Investment in real estate only in a good position, no deferred maintenance.
- Stay away from areas where rent controls, for example, Berkeley, Los Angeles.
Otherwise, you can finally afford a little money or even negative cash flow. If any of your investment goals is to be achieved high levels of cash flow to the fingers of the apartments. In California, if you have an apartment of 16 or more unitsa manager on site. This will increase the additional costs. In general, the apartments are easy to acquire and more difficult to sell. There are always many of them in each market. The apartments is that they tend to achieve high employment rates as everyone needs a roof over their heads. So the interest rate for apartments is usually ¼ - ½ per cent less than other commercial properties.
3. Special Features: The apartments are for a particular company,eg restaurants, gas stations and hotels / motels.
- Restaurants: Some investors like to invest in fast-food brands such as Burger King, Pizza Hut, Jack in the Box, KFC. These are single-tenant properties with long-term absolute triple-net lease, which often have no responsibility for the management of the owner. However, the rental income or capitalization of these restaurants are located is often less than 5-7%. Emerging regional restaurants like Johnny Carino's brand, bakingYard Burger, Zaxby or Southwestern Tia tended to higher prices of the CAP in the range of 7-8.5% interest. However, if you do not return a deeper insight into the budget for a profit. Operators of restaurants for sale real estate investors a higher rate of CAP and lease back the property for 20 years. Turn off the proceeds of the transaction with the construction of the restaurant expanded. So if you are willing to accept higher risks, you will be rewarded for the high-income countries with newRestaurants.
- Train service: When you buy a gas station, buying real estate, the two stations. Most gas stations have convenience stores and auto repair bays at times. The profit margin for gas is at 10-20 cents per gallon [fixed many customers mistakenly blame the high prices for gas station operators for the innocent], but is quite high for a store. This is called an owner-occupied homes that you are eligible for a loan stand-by with a minimumOnly 10% deposit is required. If you do not plan on managing the service station, auto repair and convenience to participate, you can stay out as gas stations is a chemical that could contaminate the soil. Once a loss occurs and contaminates the environment, it takes years and cleaned a lot of money on the ground. You may also be responsible for damages by the owners of adjacent properties, such as the contamination in May spread to their property. It is almost impossibleSell your real estate buyers lenders to borrow money to buy it.
- Hotel / Motel: After buying a hotel / motel, a property and buy 24 hours a day, 365 days a year of its existence. This activity requires hard work and marketing capabilities to reach the various parts. The rooms are useless if they are free. Companies tend to seasonal and can be immediately affected by an economic downturn and political events, for Example 9-11. Many of these properties are held by the Indiansworking with the surname Patel, as they seem harder and are familiar with the matter.
4. Offices: These properties are single-or multi-storey buildings. The older of the two-story office building with no elevators tend to have difficulty in finding tenants on the upper floor, as a service-May disabled customers who can not climb stairs.
- Single-rent properties are used as the headquarters of large companies like Cisco.These tall buildings are typically more sensitive to the economy. Once free, it is difficult to find a replacement tenant.
- Multi-tenant building of these properties are leased by small businesses, for example, real estate, tax accounting. Investors who want to buy these properties in order to diversify their investment risk more widely. If a tenant terminates the drive, so a small percentage of the lost rental income.
- The tenants of high quality: Most of them have good credit, very active and quickly pay rentMaturity.
- Leasing: The leasing of office buildings ranging from full-service [owner property tax, insurance, maintenance and utilities be paid] to nnn [afford property taxes tenants] insurance, maintenance and utilities. The lease NNN is a litmus test of whether the office building located in a strong demand by tenants or not.
- Medical Buildings: These properties are leased primarily by doctors and dentists. A high-quality medical building should be before or on the other side of the road from aHospital. This makes it more convenient for the doctors come and go between the hospital and their offices. Some investors prefer medical tenant medical buildings are evidence of a recession.
5. Shopping / Rate Centers: These centers are usually on one floor and a number of varieties can tenants: space for the school and retail services, restaurants, doctors, and even the Church. Therefore, it is the most popular type of commercial property sought by investors. Theyare always in high demand, because there are more buyers and sellers are few.
- Multi-Tenant Strip: The advantage of this investment, if a tenant goes, you lose only a fraction of total income while you are on the lookout for a new tenant. Then spread the risk for this object.
- Single-tenant building has the advantage that only with the tenant to work. Some tenants such as Costco, Home Deport, Walmart, CVS Pharmacy a lease for a warranty of 10-20 years with theirCompany's assets that could be billions of dollars. This makes your investment is very safe.
- The tenant is of high quality: Most of them have good credit, very active and quickly pay the rent in arrears. Often signs long-term leases of 5-30 years, so that we do not do to make the search for new tenants every year. Keep spending your property in good condition and even money to make it more attractive to attract customers in the shops.
- Triple Net(NNN) lease: lease shopping centers are often the owner's favor. Tenants pay a monthly fee and is to the landlord for the property tax, insurance, maintenance, and report occasionally at the cost of housing management. This eliminates the risk much more like an investor. The lease NNN is a kind of litmus paper to test whether the property is not in high demand by tenants or.
- Lease on the ground, sometimes even a shopping mall with a leasing land is for sale. WhenNew this center, we have only improved, but the country is not among them. Could a trophy property, but we think three times on investments. When the lease expires at the bottom and the owner refuses, do not you renew the lease! So it is easy to buy the Center, but very difficult to sell.
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