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Commercial real estate investment mistakes

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Commercial real estate investment mistakes

Last updated: February 4 2020
30 | Posts
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  • #11

    #11

    Re : Commercial real estate investment mistakes

    Hidden charges are also one of the key factors to be looked into when buying a commercial property. Sellers and brokers hide a lot of fees and charges, like statutory and local taxes that the seller is liabe to pay, in the property documents and sale terms. Buyers should seek clearance of such before finalising the deals.
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    • #12

      #12

      Re : Commercial real estate investment mistakes

      I agree, sellers and their brokers tend to hide taxes as then they have to either pay them off or deduct them from the transaction value. Sellers don't want to miss a single penny.

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      • #13

        #13

        Re : Commercial real estate investment mistakes

        Sellers also tend to hide or ignore impending and necessary repairs that buyers get to know only after the purchase is done.
        Last edited January 21 2020, 03:15 PM.
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        • #14

          #14

          Re : Commercial real estate investment mistakes

          Sellers also ignore or hide the insurance details of the building. They tend to charge the premuim paid for insurance of the premises as per their business requirements.
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          • #15

            #15

            Re : Commercial real estate investment mistakes

            Sellers and brokers use the word 'Proforma' when projecting earning potential and capacity of the property up for sale. Proforma is nothing but a method of calculating financial income based on certain presumptions.
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            • #16

              #16

              Re : Commercial real estate investment mistakes

              When considering earning projections, buyers of commercial properties should have a realistic approach an look beyond the projections given by the sellers or brokers.
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              • #17

                #17

                Re : Commercial real estate investment mistakes

                Buyers of commerical properties also need to evaluate the types of businesses thriving in the premises and the profits or losses being made by existing tenants.
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                • #18

                  #18

                  Re : Commercial real estate investment mistakes

                  Knowing the rent to sales ratio helps buyers of commercial properties get an idea whether the earning potential and retainment of tenants will be easy.
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                  • #19

                    #19

                    Re : Commercial real estate investment mistakes

                    Malvish what is termed as a good rent to sales in commercial properties?

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                    • #20

                      #20

                      Re : Commercial real estate investment mistakes

                      A rent to sales ratio of under 5 per cent is good. So, in any case, the rent should not be more than 5 per cent of the sales made through the business conducted at the property.
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