An Essential A-Z On Reasonable Real Estate and Property Management Programs
What Everyone Needs To Know About Commercial Real Estate
Commercial real estate investing requires a different level of expertise than other types of investing, so you need to be sure that you're fully aware of how the market operates. Whatever your needs are in commercial real estate, the tips contained within this article might just help you learn something.
For new investors and even seasoned investors, it is best to have an investment partner. Buying property can be a very expensive process. A partner can help you offset the cost of purchasing property by using cash or credit. You can pay your partner back with proceeds from the sale of the property.
In commercial real estate, go ahead and go big. If you are already going to have to go through commercial financing to work a deal, then why not look at bigger properties? The cost per unit decreases the larger the property and management of a bigger property does not require an exponential effort to the number of units. The management of a a few units is virtually the same as managing a complex.
You can round out your portfolio by investing in commercial real estate. Make sure to do your homework and realize that there are a few different playing rules in the commercial real estate market compared to the residential real estate market. There is great potential in owning commercial real estate, just do your homework well before investing.
Hire a professional to rent out your income properties. Saving money can be tempting when it comes to doing it yourself, but the time involved and the pitfalls of making a mistake with a renter are not worth it. Your time is valuable. Let a property manager take care of your investment for you.
Try to carefully limit the situations that are specified as event of default criteria prior to executing a lease for commercial property. This decreases the chances that the tenant will default on the lease. This is in your best interest.
Be sure to do research on commercial lenders. You may be able to find a great deal somewhere you were not expecting. Also note you will be required to put up a hefty down payment. Keep in mind that if the deal falls through there typically will be no personal liability and commercial lenders may be lenient if you borrow a down payment from a different lender.
When negotiating, remain strict on the information you share. Bargaining power relies on your ability to remain cautious. Information relating to your reasons for the sale or purchase, your needs, and other factors, could all lead to your bargaining power being diminished, if released too early. The negotiator could find an advantage over you instead of the other way around.
Negotiate the terms of your lease. If you are a small business owner, you should negotiate one or two year leases to ensure flexibility to grow your business. Have an option to renew your lease if you need to with a predetermined rent amount to avoid unexpected, usually catastrophic rent increase at the end of the term.
The best way to make money on commercial real estate investments is to have partners. Invest a lot of time looking for private lenders or partners to deal with. Having a partner can help provide the credit or money you may need to buy a property. You can compensate your partner by paying a fixed interest rate, a percentage of the property's income, or profit when you go to sale.
Before you invest in commercial real estate, you should challenge underlying assumptions. Even though many pro formas will look really good, you should still review the validity of the different assumptions because the pro forma could have gaps in it that need addressing: Suppose a pro forma assumes there will be two months of leasing down-time. Therefore, you should consider what would happen if the leasing down-time is six months instead of two? What would happen? This is an important assumption that needs to be addressed.
Always rent out all the available space in your commercial rental properties. Having unoccupied spaces mean that you have to pay for their upkeep. If you have many open properties, then you need to reevaluate why that is the case, and try to remedy any outstanding problems which have caused your tenants to leave.
It is possible to lose your due diligence money, so be prepared. Once your offer is accepted, you will have a certain amount of time to do your due diligence. You will get an inspection, an appraisal, inspections and other tests. These are very expensive. You might spend many thousands on the deal, to find out you do not want to purchase the property after all. It is better to back out before doing a bad deal, but these kinds of expenses are always possible.
Read square footage information carefully so you know exactly what you are getting. The square footage that is listed often includes the thickness of the sidewalls. The usable square footage is the actual amount of area you will be able to use, and the rent-able square footage is the space in which you can rent.
If you plan on investing in commercial real estate, you should aim to look over the financial status of the tenants. If a tenant's financial status is bad, then you probably should not invest in that real estate. You should aim to look over the financial statements, but if you can not find any, check out their websites or find companies that collect information about small and mid-sized businesses.
Hire a qualified commercial real estate attorney to avoid legal problems later. If something horrible happens when you are get more info dealing with real estate, the right attorney can make a world of difference.
Know your business goals before starting the search for commercial property! Know exactly what kind of office space you will be using. If you're interested in eventually expanding your business, buy more office space than you currently need. This saves money in the long run because prices may be higher by the time you're ready for more office space.
To manage your commercial real estate building wisely, make sure the property does not experience a high degree of vacancies and you will be able to control your cash flow well. If you have a lot of tenants in the building, it's a good idea to write the leases in such a way that they do not all expire at once. If all the leases run out at the same time, you may find yourself with an empty building!
In conclusion, you may be looking into commercial real estate for a variety of reasons, but, whatever the reason may be, you surely would like more information on the subject. Apply what you've learned here, and you'll be on the road to maximizing profits from your commercial real estate ventures.
Rail funding, real property tax hike weighed by Honolulu City Council in new tax bill
HONOLULU (KHON2) — A bill to tax visitors to Oahu is moving forward in the Honolulu City Council. The 3% tax will help to fill county funds after losing out on about $45 million from the state.
For years, the Transient Accommodations Tax (TAT) was designed to help with tourist impacts on the Hawaiian islands as it was collected by the state and distributed to the counties. Now, new state law allows the counties to collect it themselves at a maximum of 3%, but some councilmembers are concerned that the money will go toward the Honolulu Rail Project.
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Under Bill 40, Honolulu could collect up to $7 million per month.
“We do need to fill that $45 million puka, and that’s the first thing that the bill does,” Tommy Waters, Honolulu City Council chair and the presiding officer, said.
That money would be divided up between:
Parks and natural area support
General fund for things like police, fire and rescue costs
The Honolulu Rail Project
Hawaii residents want better management of booming tourism industry
“Now what we have in front of us is a bill that would use that money that was supposed to help with the impacts of tourists to pay for rail,” Honolulu City Councilmember Heidi Tsuneyoshi said.
The amount of revenue that would go to each has yet to be determined. Some councilmembers warn against another option to fill the $45 million lost — a rise in real property taxes.
“If there is no action taken on this 3%, there is no 45 million, then we get to cut the budget,” Honolulu City Councilmember Calvin Say said. “Let’s be honest with ourselves, I’ve publicly said all of us in this chamber. We don’t agree with raising property taxes on our residents.”
Tourism arrivals expected to remain high through 2022, Maui overwhelmed
Honolulu Mayor Rick Blangiardi fully supports the bill but does not yet know how much revenue will be used for the rail.
“Clearly I have no apprehension at all about allocating the rest of those resources. We’ll determine what that is once we can deal with the specifics towards offsetting the cost of rail,” Mayor Blangiardi said.
As the economy continues to recover from the COVID pandemic, some industry experts have warned against putting a tax on Hawaii’s economic driver.
Study found tourists willing to pay more for Hawaii culture, sustainability, locally grown food
“It’s an unfortunate time for any kind of tax increase on an industry that is struggling,” Hawaii Lodging and Tourism President and CEO Mufi Hannemann said. “We would hope that the majority of these funds, if not all of it, will be for tourism-specific projects and initiatives.”
There is another belief that tourists will continue to pay to come to the islands, even with 3% added on top of the state’s 10.25% TAT.
“We’re a premium destination, and we can charge a premium price and tourists are willing to come, as long as we continue to provide that product and that would be that the beaches are clean,” University of Hawaii at Manoa Travel Industry Management Professor Dr. Jerry Agrusa said.
Some councilmembers also proposed waiving the tax for Kama’aina, which is something they plan to talk about in future committee meetings and readings. The bill passed its first reading Wednesday, Oct. 6.
https://docs.google.com/presentation/d/1Y-6SaXPjRVtz9jg2jKWxkVu8RmnC1PiZlvtFgdq4U1E/edit?usp=sharing