Article Sphere Logo
 
Main Article Categories

 Alternative Medicine
 Arts And Entertainment
 Automotives
 Beauty
 Business
 Communications
 Computer And Technology
 Disease And Illness
 Finance
 Food And Beverage
 Health And Fitness
 Home And Family
 Home Based Business
 Insurance
 Internet And E-Business
 Legal
 News And Society
 Pets And Animals
 Product Reviews
 Real Estate
 Recreation And Sports
 Reference And Education
 Self Improvement
 Shopping
 Travel And Leisure
 Women Health And Fitness
 Women Interests And Issues
 Work At Home
 Writing And Speaking
 All 511 Categories
 
"Real Estate Investing" Article
 Article Directory Home Real Estate Real Estate Investing

3 Areas That A Real Estate Investor Should Be Aware Of When Choosing A Commercial Real Estate Investment

By Expert Author: Joel Teo
View Summary | Submitted: 2006-05-21 | Word Count: 487 words
Joel Teo
Commercial Real Estate Projects are largely similar to residential real estate except that they can be many times larger in terms of scale and may require large amounts of financing. This article covers three areas that one should be aware off when contemplating purchasing commercial real estate.

Zoning Problems

Real estate investment has a lot to do with zoning of the land and if the zoning changes while you are rebuilding the property, you might have to incur a larger than expected cost to convert the use of the property. There was this large scale residential project that was re-zoned to commercial use. As a result of the re-zoning, the developer had to spend a lot of time renovating the inside of the property so as to convert its use from a residential property to a commercial office type of setup. Thus, it's best to do your due diligence and hire a proper real estate attorney to do a check on the property for you to find out if there is impending re-zoning as it can affect your real estate investment.

Fundamental Utility Problems

The worst problem a real estate investor can face is learning about the piping and electrical problems of the property he jut bought. Thus, spending some time learning about the age of the building and when the electrical and plumbing system was last repaired is critical when looking at a potential building to acquire. The reason is that electrical and plumbing problems mean that you might have to hack through the walls and ceilings so as to replace old metal pipes that are corroding and faulty electrical circuits. This means in effect that you have to do massive renovation on the property and unless you are tearing the building down from scratch and rebuilding it, such repairs may not be worth your while at all.

Choice of tenants

Most real estate investors purchase real estate to establish cash flow and leverage their investments. Spending some time looking at the tenant mix of a commercial building can determine whether you are buying a profitable property or not. Some bankers will lend you money in proportion to the credit of your largest tenant so you would want to find a property with credit worthy tenants or source for credit worthy tenants to take over the lease. So if you have a choice of choosing and replacing some tenants when their lease is up take some trouble to analyze the tenant mix and see if there is anything you can do to improve it.

In conclusion, we have highlighted three areas that a real estate investor should take note off when purchasing a commercial property. Spending some time to scout around the building and looking at the business directory of the building can help you figure out the tenant mix and learning if there are potential piping and electrical problems. But remember to hire an attorney to help you with the zoning issues.
About the Author/Author Bio

Joel Teo is the owner of several websites and takes a keen interest in real estate investment. Visit our property investment site today to discover more real estate investment resources

Article Source: http://www.articlesphere.com/Article/3-Areas-That-A-Real-Estate-Investor-Should-Be-Aware-Of-When-Choosing-A-Commercial-Real-Estate-Investment/28333

Comments on this Article


More "Real Estate Investing" Related Articles

 

Listed below are more articles related to the above article from the "Real Estate Investing" article category.

People interested in the above article "3 Areas That A Real Estate Investor Should Be Aware Of When Choosing A Commercial Real Estate Investment" are also interested in the related articles listed below:

In the first part of the article on How to have a smooth Purchase in Austin, Texas – we had discussed some of the steps you must undertake while Buying Real Estate in Austin. In this concluding article, we will discuss the rest of the things to remember before making any property investment in Austin, Texas. Buying a new home can be an exciting time, whether it's your first home or your fifth. However, your savings, your credit rating, and your financial freedom are all on the line when purchasing a new Home in Austin, Texas.
What sets truly successful investors apart from those who are only moderately successful or – worse – those who prematurely pack it in and decide to give up on real estate investing altogether? Mistakes do it every time. However, all investors are prone to mistakes. The key to moving forward is recognizing those mistakes and working proactively to keep them to a minimum.
Buying a new home can be an exciting time, whether it's your first home or your fifth. However, your savings, your credit rating, and your financial freedom are all on the line when purchasing a new Home in Austin, Texas. You want to feel comfortable when it is time to sign on the dotted line and feel good about the home you are about to purchase. It's important not to let your emotions cloud your judgment when you set out to buy what is most likely the largest single item of your life - your new home.
Buying property is one of the largest purchases you’ll ever make. Even if you aren’t putting up a large down payment, by having a mortgage you are making yourself responsible for a sizable amount of money. There’s also the possibility of tax consequences. By saving as much cash as you can, you’ll have money for the things that inevitably pop up. As it is, you know you’ll need to pay for the closing costs and the initial down payment. Closing costs include the mortgage, fire and hazard insurance, title fees, and many other costly items.
When real estate investors evaluate their options for securing deals and making profits, there are several things that may come to mind. Whether its preforeclosure, short sales, or other types of real estate foreclosures, investing is still based on similar principles, such as seller motivation. After all, real estate foreclosure sellers are naturally going to be more motivated and the motivated seller is the ideal client for most investors.
Real estate investing is child’s play. But there’s a good chance your marketing effort is. A child is thrilled at the prospect of a bucketful of spendable cash. But an adult knows that a pipeline of high volume profits saturating your future with spendable cash is infinitely better. But how do you build a pipeline?
This articles message is to show the strategy of using loss mitigation as a way to help people and when unable to negotiate a settlement with the lender it creates an opportunity for investment via an agreement with the homeowner and then entering into a short sale offer with the lender that you have already developed a relatioship with.
Article Directory Home Real Estate Real Estate Investing

Can't find what you're looking for? Try Google Search!
(Search in 26 languages: English, Spanish, French, Japanese, Arabic, Italian, German,
Chinese Simplified, Chinese Traditional, Dutch, Korean, Portuguese, Russian, Greek, Serbian
Slovak, Hebrew, Swedish, Romanian, Polish, Norwegian, Finnish, Danish, Czech, Croatian, Bulgarian)
 
 
Copyright © 2005 - by Larry Lim, Singapore - Article Search Engine Directory at ArticleSphere.com™
All Rights Reserved Worldwide. All Trademarks and Servicemarks are the property of the respective owners.
Template Design by Internet Marketing Singapore | Internet Marketing | Singapore Classified
Español Français Bulgarian 汉语 漢語 Croatian Czech Danish Dutch Finnish Deutsch Ελληνικά Italiano 日本語 한국어 Norwegian Polish PortRomanian Русско Serbian Slovak Swedish [أربيك] Hebrew