Investing in Real estate involves a careful and a step by step procedure. A small mistake can lead to many legal hassles which can impact you in later stages of investment. Same is the case with commercial real estate investment. This market is very dynamic in nature and changes at an instant of time. Property price, rental, return on Investment and environment clearances are some of the major factors that must be taken into consideration beforehand. Scroll down and find some of the mistakes which an investor can easily avoid to enjoy a fruitful investment:
This is one of the mistakes which a commercial property investor often does. While taking a tour of the property, a broker shows you only the best part of it. This part will not have any loopholes and hence you can easily fell in the broker’s trap and get ready to invest in the property. However, it is always advisable that you must take a look at each and every part of the building from parking to lift, escalator and the fire safety system. You should also check storage rooms in case of warehouse or industrial unit.
While gathering information about the property, you must check whether the property is constructed keeping in mind the environmental norms or not. If it is an industrial property, then it should not be in the residential premises or whether the property is following all the locality norms or not. Check this beforehand as blocking money once will not be returned back.
This is another mistake people commit during investment whether commercial or residential. However, in commercial investment, there are various types of hidden charges which a seller or broker will not tell you in the earlier stages. It can be in the form of repair, renovation, and due insurance, or some other dues which the property owner had not paid will ultimately come on your head. Avoid these charges by doing proper research beforehand.
A Proforma Report is a document which a seller or a broker offers to investor giving details of the future income generation capability of the property. Avoid falling in this trap as all these reports are based on mere predictions. It is advisable to do proper research on the property ROI generation by yourself or any real estate expert.
Information about other Tenants
In case you are looking to buy a space in the building then spare some time to know about other tenants who have retail stores or shops in the complex. Take a look at their earnings, sales on monthly as well as annual basis. You must also check the lease duration of other stores whether they are for a longer period or shorter period. If they are for a shorter period then you must not invest in such property as these spaces will get vacant and you have to sit on a no man’s land place. Also, such investments are preferred as baseless.