Sensible Advice By a Lawyer About Investing In Commercial Property
You can make a lot of money investing in commercial real estate in Auckland, and it can be an exciting activity because of the scale of your investment. Commercial property prices tend to rise often when the economy is going well and there are often long-term growth prospects for good commercial real estate. However, if you have never bought or sold commercial property, then it may be a daunting task for you. To alleviate your concerns the best advice is to consult an experienced Auckland commercial property lawyer and they will be able to explain your obligations, the risks and how to protect yourself and your investment. With that said, continue to read on because we will provide you with some advice that can help clear up some basic confusion that you may have about commercial real estate.
Perhaps the first question to answer is what is your intention with commercial property? Will your business be using the property or will you lease it after you buy? This will determine how you value the building and the cash-flow forecasts from the rental income. You will want to speak with a good commercial property lawyer and a financial adviser because you want to know what loan options you have, as well as leasing options, payment and tax issues. You might not want to spend money on professional services, but it will be the single best part of your investment career because you will only benefit from their services and advice.
You will want to hire a lawyer that specialises in commercial property which is vastly different from a simple house purchase. A lawyer will take a look at your proposal and then they will make any amendments that are necessary. This means you will be able to avoid costly legal battles that may occur in the future, and avoid any confusion that may arise. They may also have suggestions about how you can better structure your deal.
You will be dealing with a lot of money with commercial real estate, and it is usually best to go for a loan when it involves investing vast amounts of money. Even with a loan, you will likely need to put down 40% of the selling price. However, the upside to this is your loan repayments will usually be a lower proportion of the rent with commercial real estate than with residential real estate, and your net cash-flow may be much better. This is important to keep in mind if you are considering investing in a commercial property.
When it comes to determining your budget, the loan repayment period will affect your decisions since a commercial mortgage is often only 10 or 15 years. It’s important to have a good projection of the rental income you think you will get from the property.
This is where your professional advisers will come in very handy. The lawyer will explain just how strong your leases are. The accountant will be able to forecast your financial and cash-flow, which can come in handy.
Looking around for the best commercial real estate is not an easy task, and you will have to put aside a lot of time to find suitable property. You will have to examine many deals before you figure out which one is the best deal. Don’t become discourage because putting aside a significant amount of time at the beginning of the process will only help you out.
Those tips should come in handy when the time comes to invest in commercial real estate. The above tips should also help you become a better buyer or seller, or even both. The important thing to increase your chances of getting the best return on your investments is making sure you use the expertise of your commercial property lawyer.
For investors in Auckland, McVeagh Fleming has highly experienced commercial property lawyers who can help with your sale, purchase, leases and negotiations. Give them a call or visit their website here http://www.mcveaghfleming.co.nz/.