Home » Real Estate

Commercial Property Analysis Can Help You Make a Thoughtful Investment Decision

May 22, 2008
Investing in commercial real estate can be a very profitable venture. Most commercial spaces have the potential to bring in much more money than what goes out for the mortgage loan. In order to make any purchase worthwhile however, it is extremely important to conduct a thorough commercial property analysis beforehand. Several factors will determine whether or not your investment will be rewarded with profit and growth.

Location
The old saying "location, location, location" definitely applies when it comes to buying commercial property. Where the building is located will determine how easy it will be to attract customers or how easy it will be for employees to get to work. In general, buildings within city limits are more valuable than those outside the city and those closer to the center of town and major roadways are worth more than those on small or obscure side streets. The area around the building will also determine the value and profitability of the real estate. The nicer and cleaner the area, the safer your investment will be.

Price
During your commercial property analysis, you should make sure that the price offered is based on the fair market value and that it closely resembles the price offered for comparable buildings in the area. Your analysis should also include an inspection of the building to find out if there are any issues or problems that would bring down the asking price.

Potential Income
Calculating the amount of money you are likely to bring in each month from renting the property is an important part of the commercial property analysis. You will have to make a monthly mortgage payment and profit; you will need to make at least that much back in rent plus some. This means attracting and keeping tenants will be essential. Check out nearby properties to discover if they have good rates of renting and retaining tenants. If buildings in the area have changed hands often in the past few years, the realty may be a financial dud.

Taxes
You will spend a fortune getting into a commercial property mortgage with a twenty percent or more down payment, closing costs, and insurance fees. One thing you may forget to plan for is property tax. These can be very hefty in some places depending on the city and state tax codes and they may add thousands of dollars to your investment expenses. Be sure to check into any local tax incentives available and figure out how much you will have to pay each year. Factoring in these taxes into your budget may limit the price tag of the property you buy.

Zoning Laws
Each city has its own set of zoning laws setting forth how certain areas of town are allowed to be used. Part of your commercial property analysis should include finding out what the zoning laws are and if you will be able to lease out your building as you please. These laws can sometimes be confusing, so be sure to learn all the details before making your purchase.

A commercial property analysis that takes all the important aspects into account is the best way to assure yourself that you are making a sound investment. Don't be afraid to ask lots of questions and request help from professionals when needed.
About the Author
Investment in commercial property is a crucial decision. Commercial property analysis focuses on the detailed aspects to be considered before making this decision such that you are completely convinced and ensured that it's a sound investment choice. You can visit http://www.kiscl.com to know more.
Rating:
Please Rate:
(Average: Not rated)
Views: 103
Print Email Report Share
Article Categories
    • Artists
    • Gambling
    • Humanities
    • Humor
    • Movies
    • Music
    • Photography
    • Tattoos
    • Television
    • Classic Cars
    • Motorcycles
    • Recreational Vehicles
    • SUVs
    • Trucks
    • Vans
    • Branding
    • Business Opportunities
    • Careers and Jobs
    • Corporate
    • Customer Service
    • Direct Mail
    • Entrepreneurship
    • Ethics
    • Financing
    • Franchising
    • Home-Based Business
    • Human Resources
    • Import and Export
    • Leadership
    • Management
    • Market Research
    • Marketing and Advertising
    • Negotiation
    • Network Marketing
    • Networking
    • Organizational
    • Presentation
    • Project Management
    • Public Relations
    • Small Business
    • Strategic Planning
    • Team Building
    • Telemarketing
    • Training
    • Data Recovery
    • Databases
    • Games
    • Hardware
    • Networks
    • Operating Systems
    • Programming
    • Security
    • Software
    • Spyware and Viruses
    • Ask an Expert
    • College and University
    • Home Schooling
    • K-12
    • Languages
    • Online Education
    • Psychology
    • Accounting
    • Credit
    • Currency Trading
    • Debt Consolidation
    • Insurance
    • Investing
    • Leasing
    • Loans
    • Mortgage
    • Mutual Funds
    • Personal Finance
    • Stock Market
    • Structured Settlements
    • Taxes
    • Wealth Building
    • Coffee
    • Cooking
    • Gourmet
    • Recipes
    • Wine and Spirits
    • Acne
    • Aerobics
    • Alternative Medicine
    • Beauty
    • Cancer
    • Cosmetics
    • Depression
    • Diabetes
    • Diseases and Conditions
    • Fitness Equipment
    • Fitness
    • Hair Loss
    • Heart Disease
    • Medicine
    • Men's Health
    • Muscle Building
    • Nutrition
    • Skin Care
    • Supplements and Vitamins
    • Weight Loss
    • Women's Health
    • Yoga
    • Arts and Crafts
    • Babies
    • Collecting
    • Elderly Care
    • Genealogy
    • Hobbies
    • Parenting
    • Pets
    • Pregnancy
    • Woodworking
    • Feng Shui
    • Gardening
    • Home Appliances
    • Home Security
    • Interior Design
    • Landscaping
    • Affiliate Programs
    • Article Marketing
    • Auctions
    • Audio
    • Banner Advertising
    • Blogging
    • Broadband
    • Domain Names
    • E-Books
    • E-Commerce
    • Email Marketing
    • Ezines and Newsletters
    • Forums
    • Internet Marketing
    • Link Popularity
    • Pay-Per-Click
    • Podcasting
    • RSS
    • Search Engine Marketing
    • Search Engine Optimization
    • Security
    • Social Media
    • Spam
    • Video
    • Viral Marketing
    • Web Design
    • Web Development
    • Web Hosting
    • Copyright
    • Cyber Law
    • Intellectual Property
    • National, State, Local
    • Patents
    • Regulatory Compliance
    • Trademarks
    • Baseball
    • Basketball
    • Boating
    • Cycling
    • Extreme Sports
    • Fishing
    • Football
    • Golf
    • Hockey
    • Hunting
    • Martial Arts
    • Running
    • Scuba Diving
    • Soccer
    • Swimming
    • Tennis
    • Dating
    • Divorce
    • Marriage
    • Weddings
    • Astrology
    • Buddhism
    • Christianity
    • Faith
    • Hinduism
    • Islam
    • Judaism
    • Meditation
    • Metaphysical
    • New Age
    • Cable and Satellite TV
    • Cell Phones
    • Communication
    • Gadgets and Gizmos
    • GPS
    • Satellite Radio
    • Video Conferencing
    • VoIP
    • Addictions
    • Coaching
    • Goal Setting
    • Motivational
    • Stress Management
    • Time Management
    • Clothing
    • Electronics
    • Fashion
    • Gifts
    • Jewelry
    • Causes and Organizations
    • Environment
    • History
    • Holidays
    • Men's Issues
    • Nature
    • Philosophy
    • Politics
    • Women's Issues
    • World Affairs
    • Air Travel
    • Camping
    • Cruises
    • Destinations
    • Outdoors
    • Article Writing
    • Book Reviews
    • Copywriting
    • Fiction
    • Non-Fiction
    • Poetry
    • Quotes
    • Screenplay
    • Tools and Resources