Many real estate brokers and agents prefer to work only within the commercial real estate market given the types of properties available locally and the specific requirements of clients and businesses.
There are real differences in commercial property that make the market segment quite attractive to agents. Some of the most common factors are:
- Very little weekend work to do
- Repeat buyers purchasing as investors
- Specialised segments by property type
- Good commissions from rents and sales
- Businesses locally are an established segment of opportunity
You can make a very good living from the commissions achieved in commercial real estate sales, leasing, and property management. That being said, there are some real differences to think about and cover the when it comes to the listing process with any commercial, retail, or industrial property.
To understand the differences between commercial verses residential property, it is important to remember that the clients in each segment of the market will have a unique and very different perspective on why they are purchasing or leasing the property. Understand the property market from their perspective.
With any residential property purchase or rental, the logic is more emotional and the decisions are driven accordingly. With any commercial, retail, or industrial property investment, the decisions and the motivations are logically based around location, income, property improvements, and potential.
Ask Quality Questions
When you are to list a commercial property for sale or for lease today there are many things to cover and think about; there are questions to ask. A checklist developed for the property type and the location will always help you tap into the right issues and consequently ask the right questions.
Don’t lease or sell a property without fully understanding all the applicable elements and factors impacting occupancy and ownership; when in any doubt ask more questions.
Here are some simple ideas to help you establish an effective and direct listing process applying to your commercial property segment:
- Regional and location issues – Check out the location before you check out the property. Understand the geographical and topographical issues that may have an impact on the property location. Look at the levels of the land, the location of Rivers and Creeks that could be subject to flooding, and the threats from other adjoining properties or nearby natural topographic features. If necessary get a soil or ground water report for the region and the property, and review any engineering or structural studies that could have an impact on the building.
- Building or property history – What has the property been used for over the years and has that property been identifiable due to tenant occupancy or business use? Will that have an impact on the marketing of the property today and should that use be prominent in your marketing? Some properties will have a history and consequently a level of local interest that can be merged into the marketing campaign and editorials. If there is a story about the property that can create greater levels of local interest, then build your campaign accordingly.
- Title details – Understand the ownership structure for the property and the legal entities that you are dealing with. Make sure that the right people are talking to you about the property as it is today and what they want to do with it.
- Tenancy mix – Review all of the leases for the property taking into account the tenancy mix as it exists today. Inspect the property at the same time so that you can cross reference lease documentation and look for any errors or omissions in tenancy description.
- Income – Any investment property will have a history of income and expenditure to review and consider. It will also be necessary to understand the levels of market rental for the location in comparison to the achieved levels of rental in the property today. The rental levels will have an impact on property yield and therefore potential property price.
- Expenditure – The expenditure for the property can be checked against the averages that apply to the other properties in the location. If your property listing has a high level of expenditure for its property type, then the reasons should be investigated and understood before you move to any sale or lease. Any property with a high level of expenditure against passing income will be difficult to sell and or lease.
From these things you can delve deeper into property ownership, performance, and potential. In that way you will be ready to promote the property correctly and completely to the right buyers or tenants as the case may be.