Archive for October 2010
Commercial Real Estate Investing
Any investment involves the commitment of funds to investment alternative with an aim to generate income. Commercial real estate investment in India is involved in generating income through rental, lease or capital appreciation. Real estate refers to immovable property, such as land, and everything else that is permanently attached to it, such as buildings. When a person acquires a real estate property, s/he also acquires a set of rights, including possession, control and transfer rights.
Understanding commercial real estate investment is crucial because it usually involves a substantial investment and a long-term one. Moreover, the commercial real estate market can be unpredictable, as there might be lack of buyers at one place and there may be pool of buyers at another place. Investors have many alternatives of investment in commercial real estate.
One can opt for real estate investment with an aim to rent the property. The owner earns a continuous stream of rent, but is responsible for paying the mortgage, taxes and any costs associated with maintaining the property. The owner also benefits from capital appreciation over the period of time. With the aim of renting the land, owner runs the risk of not finding a tenant and could suffer negative monthly cash flows, with mortgage payments and maintenance expenses still to be borne. One with the aim to gain only capital appreciation over the time and then selling it again then investor should have strong patience. With such aim generally huge cash is locked at one place for a long period.
Rental properties in India can be purchased with borrowed funds. This means that you can purchase a rental property by putting down only a percentage of the total value. Essentially, you can control the whole property and the equity it holds while only paying a fraction of its total cost. Also, the property you purchase secures the debt rather than your other assets.
Although commercial property investment has higher returns than residential property, the risks associated are usually higher as well. The main risks involved in commercial property investment are:
Risks Involved in Commercial Property Investment
Capital intensive – commercial property can be very expensive, and hence depend on the quality of your investment. There is less room for diversification within the sector unless you have large amounts of capital at your disposal.
Tenant default – although the rental income from commercial property is high, there is always a risk that the tenant will default on the lease. This is increasingly becoming a problem, with many tenants defaulting on leases as they go out of business due to high level of competition. However, it is possible to regain the income stream by re-renting the property, but this can take time and can stop the flow of funds.
Low liquidity – the value of commercial property can be greatly affected if you need to sell quickly.
No definite value – because property prices are generally decided by the opinions of experts and not the pure market forces of supply and demand, the property has definite value. The only way to truly know what the property is worth is by selling it. This means prices can fluctuate fairly often, and this may mean that you can lose money when selling.
Despite of so many risks involved in commercial property investment, it is still one of the most profitable investment sectors. If you find the right commercial property investment, you will get a good return from your investment.
Commercial Properties Developer India
Pacifica Companies Pvt. Ltd., is one of the leading real estate developers in India following such constructed procedure to finalize the deals to avoid the later discrepancies. We offer a wide range of future opportunities of commercial real estate investment in India. We specialize in providing the best deals for your commercial real estate projects and residential real estate projects like apartments, bungalows, townships etc. Invest on commercial projects or residential schemes in India and you are definitely going to enjoy the continuous cash flow yielding maximum returns on your investment if dealing with Pacifica – a leading real estate development company in India.
I am a junior in high school and looking to pursue a career in commercial real estate investments. I am lost as far as what classes and degree majors to focus on in college. Also, after and during college where do I need to start that will lead to commercial investments? Is selling houses the only way to work my way up to commercial?
If you are looking for low-priced commercial property for sale, Houston might not be your best bet. However, if you are looking to make a good real estate investment or buy premises that will really allow your business to grow and give you access to all of the clients you want, then you should definitely be looking at the commercial real estate Houston, Texas has to offer.
One of the things that has contributed sharply to the growth in the Houston property market is simply the fact that it has not slowed down as much as many other local property markets! The changes in subprime lending laws have resulted in a lot of Americans not having the money to purchase smaller properties, or spend as much as they like. However, Houston seems to have been relatively unaffected by a lot of these developments and property sales have not decreased significantly in either the residential or commercial sectors.
Houston, Texas has a lot of commercial real estate on offer, but some of these are better buys than others. All of these properties are chosen on high traffic count and are prime spots for commercial retail. Houston is a massive consumer community and retail stores with high traffic really do well in high traffic areas.
Several large name retail outlets have already moved in, and all of these enterprises are doing extremely well. The high traffic of this retail real estate is a veritable river of revenue, and many new businesses are enjoying unprecedented growth a few short months after opening in a new development.
Allot of the commercial real estate Houston, Texas has to offer has already been bought up, but new buyers need never fear as you will often find new developments changing hands several times in their first few years as ownership settles. There are a lot of good bargains to be found as companies sell of real estate to focus on other investments, and commercial buyers interested in picking up an excellent investment should look out for these.
Regularly checking the property listings will almost certainly lead to some excellent finds. A lot of new developments have not really been spotted by commercial interests from out of town, and many people have under estimated the Houston retail market.
There are developments where small retail premises can be bought for under $150,000, and these are all adjacent to well-populated housing developments situated in high income areas. If you are a retailer and you want to target a high-spending group, then some of the newer Houston neighborhoods are one place that you can really make a killing!
If you are buying simply for the sake of investing in commercial real estate, Houston Texas is definitely a great place to start for the first time investor. With low prices on fairly high revenue potential properties a careful investor can pick up a high income property for very little capital laid down. The rental from these properties will necessarily be low for the first year, but as soon as the retail potential of the premises becomes realized the rent potential will increase dramatically.
Buyers should not be put off with the recent slowing in housing sales in the area, because the number of new housing developments being built is a testament to the demand for new homes in Houston! Many people are relocating to this city and many investors are buying property in Houston for the same reason – stability.
While there seems to be an impending housing crisis just about everywhere else the property prices in and around Houston have suffered remarkably little from this. This shows great promise for long term property investors, as well as anyone who wants to ensure that their home appreciates significantly in value. This has great implications for anyone interested in investing in commercial real estate in Houston, Texas.
You can advance your profits by investing in commercial real estate. On the other hand, if you’re not heedful, you can go bankrupt. Investors can make costly miscalculations. There are a few tips and hints that will help you avoid these miscalculations. If you know what you are doing, commercial deals are effortless to put together.
You must know Your market. You can see the rate of development in the area by doing a market analysis. This will also let you know if it is on the downfall. Distressed areas will not better the commercial investor. You might be capable of beating the real estate predicament, but success is less likely with a commercial real estate investment. You can identify whether or not the local job market is being damaged by doing some market research. The job market generally slows down when the market is in predicament. This is a sign for you to look else where for your commercial real estate investment. If the market appears to be on the rise, vacant store fronts might be a good object of significance. Several people favor starting a business in a growing market. Warehouses may not be in demand, however, a store front could sell rapidly.
Remember to inspect the complete commercial real estate property. You cannot do this alone. The necessary amount of money to hire a professional is insignificant compared the the amount that you can save by doing so. Don’t forget to have the property on which the building is positioned inspected as well. In order to start his own business, one man purchased a small repair shop. Although the property was moderately priced, the previous owner was given a citation from the state to have the subterranean fuel tanks removed. The new owner was in operation for six months, completely uninformed of this. Before the owner could reopen the business, the state demanded one hundred thousand dollars of repairs. He could have avoided this financial disaster had he spent a little money and hired a professional to do the inspection.
Be sure that the money you borrow is less than the amount that you can make back. Many investors borrow money as a means of buying their commercial real estate property. As long as the interest rate is appropriate this can be beneficial. An expert investor determines beforehand that the profits from the property will cover the loan. It is easy to forget the appraisal of real estate when you become overwhelmed by an exciting deal.
It is commonly known that you should stick to what you know. If you are knowledgeable with restaurants, buy a restaurant. Pay for a service station if that is what you are knowledgeable with. A commercial property should never be purchased if you know nothing about it. One instance where you can buy one of these commercial real estate properties that you are unfamiliar with is when you are lucky enough to have a business partner who is knowledgeable with the business. Turn your back and walk away if you are not so lucky. Other properties can make you plenty of money if you just probe the market.
If you want to make a lot of money in commercial real estate investments, you simply have to learn the market and follow some common guidelines. Don’t stray from your marketing plan. You can avoid predicaments if you stay within your budget.
I know you must take course and Ive tried searching online but my results are vague bc I dont exactly know what Im looking for. Does anyone have any info about the length of classes, approximate cost, level of difficulty, tips or anything? Any helpful sites? I live in maryland and by the way is commercial is different from a regular real estate license? Thank you!
can I just study on my own then take the exam for commercial real estate? Is it a requirement I take classes?