Investing in Commercial Real Estate in Albany
It is a very lucrative business investing in commercial real estate in Albany and the North Shore in general. It is an exciting prospect for many investors due to the rising real estate prices in the market and the long-term growth prospects for the area. The process of buying and selling commercial real estate is somewhat daunting if you are not used in it. This article will help to clear up some of the basic confusions you may have in investing in commercial real estate.
You need to be clear on whether you will be using the property or leasing it once the property is purchased. Remember, commercial real estate is a big investment initially. You should consult your financial advisers and lawyer on the various loan options available, payment and tax issues and leasing options available to you. Even though it seems a lot of money up-front for professional service fees, you can reap the highest benefit by being smart on your investment.
You need to be clear on whether you will be using the property or leasing it once the property is purchased. Remember, commercial real estate is a big investment initially. You should consult your financial advisers and lawyer on the various loan options available, payment and tax issues and leasing options available to you. Even though it seems a lot of money up-front for professional service fees, you can reap the highest benefit by being smart on your investment.
Seek the assistance of lawyer, who is specialising in real estate, to review your documents before you go looking for finances. The lawyer will be able to review your proposal, assess the strength of the existing leases and do any necessary amendments before you go out shopping for finances. This will help to avoid any confusions or legal battles in the long run.
Commercial real estate investment involves dealing with large amounts of money. It is always better to go for a loan when investing such amounts of money. Even so you will probably have to put down 40% of the purchase price since it is rare for commercial mortgages to go above 60%. One benefit of this is that it means your loan repayments are proportionately lower than with residential property investment so you should have a much better nett cash-flow. Keep this in mind before investing your money on a commercial property.
The loan repayment period will have an effect when determining your budget. For this you need to have a good projection of the rental income you can expect from the building. If the loan repayment terms seem to eat into your income and prevent you from keeping your business above water, you will definitely have to head back to the drawing board.
Here again your professional advisers will be invaluable. The contract lawyer will be able to explain how strong your leases are and the accountant will be able to run financial and cash-flow forecasts for you.
Commercial real estate investment involves dealing with large amounts of money. It is always better to go for a loan when investing such amounts of money. Even so you will probably have to put down 40% of the purchase price since it is rare for commercial mortgages to go above 60%. One benefit of this is that it means your loan repayments are proportionately lower than with residential property investment so you should have a much better nett cash-flow. Keep this in mind before investing your money on a commercial property.
The loan repayment period will have an effect when determining your budget. For this you need to have a good projection of the rental income you can expect from the building. If the loan repayment terms seem to eat into your income and prevent you from keeping your business above water, you will definitely have to head back to the drawing board.
Here again your professional advisers will be invaluable. The contract lawyer will be able to explain how strong your leases are and the accountant will be able to run financial and cash-flow forecasts for you.
Searching the best commercial property on the market is not going to be easy. You will have to allocate a fair amount of time for this purpose. You may have to examine many deals in arriving at the best deal. This should not discourage you in anyway. Allocating a fair amount of time for your search at the beginning itself will help very much in this regard.
The aforementioned tips will help you immensely in investing in commercial real estate in Albany. You are now better prepared to be an effective buyer and seller, or both for that matter. Remember to adhere to this advice when you are planning to purchase your next commercial real estate property. It will help you in getting the best return on your investment.
McVeagh Fleming are commercial real estate lawyers in Albany. www.mcveaghfleming.co.nz
The aforementioned tips will help you immensely in investing in commercial real estate in Albany. You are now better prepared to be an effective buyer and seller, or both for that matter. Remember to adhere to this advice when you are planning to purchase your next commercial real estate property. It will help you in getting the best return on your investment.
McVeagh Fleming are commercial real estate lawyers in Albany. www.mcveaghfleming.co.nz