Most investors invest in real estate for the main purpose of creating a long-term means of wealth for themselves. However, unlike residential real estate, commercial real estate is a larger investment that comes with a higher amount of risks. In face of these challenges, how may a business owner optimize the value of their commercial real estate property?
How May a Business Owner Optimize the Value of Their Commercial Real Estate Property?
There are several different strategies that you, as a real estate investor, could employ to increase the value of your commercial real estate property. Some of these ways include carrying out proper maintenance, decreasing expenses, and hiring the help of professionals.
Ideally, the value of a real estate property is proportionate to how much money it can generate. Therefore, the best way to increase its value is by making sure that you increase the amount of money it can be leased or sold for.
As a result of depreciation, commercial, as well as residential buildings cannot last forever. This is why their value needs to be maximized while they still have some to offer. Below are some strategies that a business owner can employ to optimize the value of their real estate:
Know Your Local Market
Location is key when it comes to real estate investment. As an investor, studying the local markets where you have properties to understand how they work will give you an advantage when the time to lease comes.
For example, states in the Midwest have their economy centered around agriculture, financial services, and manufacturing. Hence, if you own commercial property in the Midwest zone, restructuring your property to fit the exact needs of a financial institution or a manufacturing firm will increase your property’s value, and ultimately, help you get more tenants.
Hire an Experienced Broker
Hiring a professional local realtor to help you sell or lease out your property could also go a long way in helping you optimize its value. A good realtor will provide your property with the exposure that it needs. Also, thanks to their understanding of your local market, you can be sure of getting the best deals in prices.
- Offer professional advice for new investors
- Market your property for sales or lease
- Vetting of potential tenants or buyers
- Help appraise your property to determine its value
- Broker the best deals possible for you.
Perform Proper and Frequent Maintenance
Carrying out routine maintenance checks on your property not only helps you grow its value, but also ultimately increases its lifespan. This implies that you get higher returns for a longer period of time than you ordinarily would without maintenance.
A building with a well-maintained exterior and interior is more likely to catch the attention of business owners in search of an office space. To make sure that this maintenance is carried out properly, you could employ the services of professionals such as maintenance supervisors, technicians and plumbers.
Reduce Operational Costs
Finding a way to reduce the amount of money you spend on your properties to cater for utilities is one smart way of gaining more in terms of profit. In simpler terms, the lower your operational costs, the higher the value you can get from your property, and by direct implication, the better your return of investments.
You could decrease expenses by switching to energy saving light bulbs to reduce electric bills, making use of solar panels, or sharing the bills with your tenants. Also, if you are looking to lease out your space to large companies, keep in mind that many of them will rather go for properties that are energy approved.
Can I Sell My Commercial Real Estate Property While It Is Still on Lease?
Yes, you can decide to sell your property while a tenancy term is still ongoing. The new owner simply takes over the property and inherits all tenants, and could either keep leasing out to them, or refuse a renewal after the end of the contract.
How Do I Maximize Space in My Commercial Property?
You can maximize space in your commercial property by:
- Making use of the right furniture
- Building up instead of out
- Making use of space underneath staircases
- Implementing a space monitor
Many of the methods through which business owners can optimize the value of their asset involve making one improvement or the other. However, a simple step in commercial real estate transaction such as hiring the right realtor service, like Si Vales Valeo Real Estate could also go a long way in helping to achieve this goal.