Best Approach to Evaluate Commercial Property Values
Looking to buy or lease a commercial property? First, you need to answer this question, “how much is it worth?” Do you intend to run a business out of the property, plan to use it to earn money from rental income, or renovate and flip it? In any case, having a firm understanding of the different types of properties and their value might mean the difference between a rewarding or loss-making transaction.
That said, putting a value on commercial properties for sale is a crucial factor when you want to determine whether it’s best to include real estate in your investment portfolio. To have a clear picture of a property’s value, it’s worth having a chat with a commercial real estate agent.
Like any other investment, success in the commercial properties for sale market starts with a clear blueprint. Besides that, you need to take a multi-pronged approach to find available real estate. Plus, reach out to a commercial real estate agent with excellent interpersonal skills and an excellent eye for value in commercial properties for sale to score the best deal.
Key Commercial Real Estate Market Metrics
A commercial broker uses the following metrics to help a buyer build a profitable real estate portfolio.
- Net Operating Income (NOI)—to have a favorable NOI, you’d want to know the proposed property’s 1st-year gross operating income, then deduct the operating expenses for the same year.
- Cap Rate—a commercial real estate property’s cap (also known as capitalization rate) helps determine the worth of income-generating properties. Cap rates help evaluate the net present value and also provide estimates of future earnings or cash flows.
- Cash on Cash—real estate investors that plan to use the funding option to buy or lease a commercial property often have to abide by the cash-on-cash blueprint to size up the 1st-year performance of several competing properties in the same real estate market.
Who Is a Commercial Real Estate Agent?
Put simply, a commercial real estate agent legally arranges and negotiates real estate transactions. These agents provide professional services to investors wishing to buy, sell, or lease commercial real estate.
Commercial real estate brokers have extensive experience with various asset types like office, retail, industrial, multifamily, hotel investing, healthcare, motel investing, seasonal properties, and much more. Their real estate license also allows them to work independently or, at times, with other agents.
Instead of a one-size-fits-all solution, a commercial real estate agent with adequate training and experience delivers tailor-made solutions. Let’s look at some of the services you might expect from a commercial broker when you’re looking for commercial properties for sale.
1. Acts as The Intermediary
The primary role of a commercial real estate agent is to work as an intermediary on commercial properties for sale transactions—mainly as a link between owners and potential buyers.
They bring buyers and sellers together. By acting as agents for one or both parties, the broker has special responsibilities defined by law, which they must adhere to throughout the process.
These responsibilities constitute a fiduciary relationship, where the broker individually owes both the seller and the buyer a fiduciary duty to act in the other’s interest.
2. Coordinate Exchanges of Ownership
These specialists help buyers locate commercial properties. Else, a commercial real estate broker assists sellers to market or attract buyers to their properties. As they do so, these brokers ensure both parties engage in reasonable negotiations to reach a fair price point.
In assisting the two parties, the brokers will oversee the transactions in the deal’s best interest. This service becomes less hectic if the broker has excellent marketing skills, negotiation skills, and a proper understanding of the real estate market.
3. Manage Portfolio of Rental Properties
The broker manages daily operations of the commercial property or portfolio of properties on behalf of the owner. The portfolio is a collection of different types of commercial real estate investment assets held and managed to achieve a financial goal.
Let Us Help You Achieve Your Diversification Goals
Are you interested in commercial real estate investing? Be sure to get the best commercial real estate agent. Anthony Maccaroni is a successful commercial real estate agent who mediates in commercial real estate for sale transactions in Pinellas County.
As commercial real estate professionals, we can get you exclusive access to classified commercial real estate properties that meet your financial needs. To find out more about potential investment opportunities in Pinellas County, Fl and how Anthony Maccaroni can help you with your diversification goals, call us today.