How Do you Select Best industrial property and commercial business Buildings for sale in Johannesburg South?
[tag] is a specialist field. Not all property agents know enough about the commercial property market and the property type to do it well. Sellers in Johannesburg South should choose their agent with care.
The owners of investment property that want to sell their asset should carefully choose a real estate agent that is well versed in the market trends and the property type. That agent should also show a high level of current market share and success in commercial property in Johannesburg South over the years.
Selling commercial property is not an ‘experiment’ or an exercise in ‘hope and pray’. When undertaken correctly in any market situation by a skilful agent, a property will attract enquiry and a sale is possible. The result then sits on the client’s ability to accept the industrial property for sale market price and market evidence. There are always buyers out there; they just have to be found and the sellers need to be accepting of the market trends.
Interesting Facts About Industrial Property and Commercial Business Buildings for Sale in Johannesburg South:
Before we answer this question, it might be helpful to actually define each term first.
Retail and industrial are both considered 'commercial real estate' (as opposed to 'residential real estate'). Commercial real estate refers to buildings or land intended to generate profit; industrial and retail are simply sub-categories of commercial real estate.
Firstly an industrial property is defined as a property used for the actual manufacturing of something, and can be considered either a factory or plant. This is usually zoned for light, medium or heavy industry. This includes things such as warehouses, garages and distribution centers etc.
Retail property is a commercially zoned property used solely for business purposes, the actual selling of the product, rather than its manufacture - retail stores, malls, shopping centers and shops all huddling nicely under the retail umbrella.
3) Natural Light - in especially high demand nowadays
4) Location - close to other offices, public amenities, transportation etc.
Since 1980, retail property has returned an average of 9%, though is currently returning around 6%. Industrial real estate tends to be the most volatile, and is currently returning around 7% (as opposed to its peak of around 12% during the 1990's recession).
And obviously, no matter which form of commercial property you're considering, read the lease carefully. Sounds like a silly thing to say, but you'd be very surprised at the issues that can become issues simply because things weren't read properly!
Industrial Property Buying Tips and Tools
Real estate has always been known as the safest of investments.
In fact, real estate investment completed after proper research into and evaluation of the property (to determine actual and future value), can lead to tremendous profit.
This is one reason many people choose real estate investment as their full time job.
Discussions about real estate tend to focus on residential real estate; commercial real estate, except to seasoned investors, typically seems to take a back seat.
However, commercial real estate is also a great option for investing in real estate.
Commercial real estate includes a large variety of property types.
To a majority of people, commercial real estate is only office complexes or factories or industrial units.
However, that is not all of commercial real estate. There is far more to commercial real estate.
Strip malls, health care centers, retail units and warehouse are all good examples of commercial real estate as is vacant land.
Even residential properties like apartments (or any property that consists of more than four residential units) are considered commercial real estate. In fact, such commercial real estate is very much in demand.
Or in another case (i.e. when a retail boom is expected in a region), though your commercial real estate investment strategy was devised around purchasing vacant land, you might find it more profitable to buy a property such as a strip mall or small plaza that you can lease to retailers or a property that you can convert into a warehouse for the purpose of renting to small businesses.
So in a nutshell, commercial real estate presents a veritable plethora of
investing opportunities, you just need to recognize them and go for it.
About the Author:
Dave Jarvis is a licensed Real Estate Broker in Florida and is Broker and Owner of Realty Concepts, Inc. a Southwest Florida Real Estate Corporation.
If you are interested in Southwest Florida Properties see his website at [http://www.rciflorida.com]
For additional Real Estate information go to: [http://www.realestateseekerusa.com]
For Real Estate Financing information see : [http://www.mortgageseekerusa.com]
Search for Commercial Retail Space For Sale Near Me in Johannesburg South
When you are trying to get comps for commercial real estate it is imperative that the comps you get are up to date, since you need to know what the property you are looking at is currently worth. This will help you get an accurate idea of what the market value of the property is. When you go with comps that are too old, it will not give you an accurate idea of the value in today's market. Usually you'll want to go with commercial real estate comps that are less than six months old. The comps you get also need to be "like" comps as well, since you'll want the comps to depict the accurate value of the property you are interested in. Basically you don't want to compare an industrial property with an office building, since this won't enable you to come up with the accurate value. Be sure that the comparables you get are similar to the size and type of the property you are looking into.
Considerations When Researching Comps
When you are researching your comps in order to acquire accurate data on the commercial real estate you are considering, there are several factors you'll need to keep in mind. The following are a few things to consider in order to get the best possible comparables.
Consideration #1 - Similar Properties - The comps that you choose need to be similar properties, in both type and size, to the commercial real estate you are planning on purchasing.
Consideration #2 - Price Range - The price range of the properties that you use for comps should be close to the asking price of the commercial real estate you are planning on purchasing.
Comps that are "As Is" - These comps are properties that are similar to the commercial real estate you are considering in the current state of disrepair and current zoning. You cannot use comps that have been rezoned or improved.
After Developed Value Comps - This is a comp that involves land that has been improved with the infrastructure needed for building construction. This can include sidewalks, curbs, streets, utilities, gutters, and sewer.
After Repaired Value Comps - These comps are used when you have a building that needs to have some repairs done. This deals with the price that the property will be worth on the current market after you have restored it to good condition.
As you can see, having accurate comps is very important when getting into a commercial real estate deal. If you cannot get your broker to give you the comps you need, then you may want to tell them you'll have to either get out of the deal or find another broker that can help you find the comparables you need to make an informed decision. Usually, this will help motivate the broker to get the comps you need, since the broker won't want to lose the deal or their commission. Either way, make sure you find strong and accurate comps that allow you to make an informed decision on your commercial real estate deal.
How To Value Commercial Property
The very first thing you need to ask yourself when wanting to purchase a new commercial property is what is its value not it's selling price? You need to know what you're going to be able to sell it for in order to make a profit before buying it. Also ask yourself if the asking price is relative to the income the property is generating.
Vendors usually take chances and try to price a commercial property based on its future value. Unfortunately most vendors don't get their properties sold as banks don't look at the future value but the current market value of that property. So how do you value commercial property? Below are three tips I use to help me make the right decision when buying a property.
In other words if you have a property that generated R150,000 per year but it has expenses of R50,000 per year that would leave you with a NOI of R100,000 per year. If you purchased a property worth one million rand and it generates a income of R100,000 per year that would be called a 10 cap property. The 10 cap means you would get a 10% return on your investment each and every year for your one million rand invested assuming you bought the property cash.