When
speaking with a group of real estate investors recently in Nairobi, the
question arose as to how many of them have completed a commercial real estate
deal in the last year, and surprisingly, the answer was none. It seems that
many of them were either happy with the currently market conditions or they
didn’t really have the aptitude to go about buying a commercial property.
Market
specialization? No. It seems that the majority of real estate transactions go
something like this:
1. Residential
real estate is the sweet spot of the small real estate investor.
2. Commercial
real estate is typically left for the small business owner, who has decided to
stop renting.
3. Both
of these sectors of the real estate industry do have some crossover, but the
previous two statements are typically the norm. So how exactly are commercial
properties being bought, sold, being rented?
What’s the best way to acquire commercial real estate, and who you need
to help you in doing an acquisition?
Here
are five key points to consider:
1. By
far the most popular business entity for owning commercial real estate is now
the limited liability company (LLC).
2. Commercial real estate is a much less popular
subject, in part, because it isn't as personal and doesn't tug at our own
financial purse strings.
3. Commercial
real estate is a term to describe a property with 5 or more units. Commercial
Real Estate is a critical component of any well-run business.
4. Investing
in commercial real estate is riskier and more costly than investing in
residential property - but ultimately it can be far more profitable.
5. Commercial
real estate is a business investment driven by economic factors, not so much
the property itself.
Investing
in commercial real estate can be a good way to invest but you should make sure
you are well represented by an attorney and accountant before moving forward
since buying commercial real estate can have significant tax consequences and
if you're buying or developing commercial real estate, it's important to
protect your financial interests with legal support. It may sound redundant,
but the axiom location, location, location, is an important factor in buying
commercial real estate too. Here is the key to buying commercial real estate:
the one with the most information wins.
The
winners are the people that recognize that the world of commercial real estate
is constantly changing and understanding the nature of commercial real estate
is a precondition to the timing question.
They also understand the data and realize that information is the most
critical aspect of any transaction. In other words, the most valuable commodity
you can have in the commercial real estate market is information.
To find more
on this go to www.kenyan-real-estate.com
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