Ultimate Secret of Commercial Properties – Dealing in commercial properties isn’t a task for amateur investors since it requires thorough research and some effective analytical skills. Even so, there are many investors who can gain incredible returns by starting out in commercial properties. To ensure this success, it is essential to know a few strategies that even expert investors benefit from. This guide can tell you the most precious information you can find relating to investing in commercial properties. This ultimate secret will allow you to know exactly how valuable a property will be for you.
The Ultimate Secret
- The ultimate secret involves knowing four basic things about the property before you start to invest in it. These are – Price Per Unit, Cap Rate, Sub Market Rent, and Expenses Per Unit. Knowing these can help you analyze the value of the commercial property and know just how much you can expect from it in returns.
Price Per Unit
- The first thing you need to know about a piece of commercial real estate is the price per unit. This is the easiest thing to figure out and your real estate agent can help you in analyzing it. The main purpose of knowing it is to help you be sure that you are not overpaying for this property.
- The second thing that you need to know is the cap rate for your sub market. This will help you know the exact value of your property as per the given market rates. The lower the cap rate of the sub market, the higher you will be required to pay for it. You can get this value by analyzing the information provided by your agent.
Sub Market Rents
- Since every sub market has its own rents, you need to know the values for one, two, or three office spaces. This will help you to know the potential upside on the rent and know whether your real estate broker is being honest while telling you that you can increase the rent by some percentage. You can easily access this information online.
Expenses Per Unit
- The expenses per unit on your property will help you know your exact potential for profits from the investment. These expenses will vary depending on the kind of agreement you have with your tenants. For example, a NNN lease agreement will give you minimal maintenance expenses. You can estimate a high and low value for this and use that to check your net profits.
- By using the above information, you can ensure that your real estate deals will always be profitable for you. Another way to ensure that your commercial real estate provides high returns is to go with VRS Ventures and their District One commercial projects.