Commercial Real Estate Buying Guide

• Discover Commercial Real Estate
• Determine Your Commercial Real Estate Goals
• Plan Commercial Real Estate Investments
• Find Commercial Real Estate on halfvalue
• Buy Commercial Real Estate With Confidence

Commercial real estate is potentially any real estate other than a single-family home. The term generally applies to office buildings, apartment complexes, retail properties, warehouses, educational buildings, and manufacturing facilities.

Commercial real estate can already have a business on it, like a gas station or a restaurant. It can also be unused space, like a vacant lot or mini-mall.

Buying commercial real estate can be a good way to invest your money. Most people start buying commercial real estate for one of the following reasons: a specific business use, extra rental income, or to build equity.

Run a business with commercial real estate

Some people buy commercial real estate with a specific use in mind. They want to open a store, restaurant, or bar and need a place to put it. Buying the property can provide definite benefits over renting, including building equity (see below) and the ability to manage your commercial real estate space without restrictions from a property owner.

Earn extra rental income with commercial property

People who buy commercial property are also often looking for some extra income. Whether you’re interested in buying a duplex, an apartment complex, or a mini-mall, renting out your commercial real estate space can be a great way to earn some extra money. In a growing market, where real estate prices are rising, someone else is helping you build equity. If you rent out half of your duplex, your renters are helping you pay your mortgage and build equity (see below). Be sure you understand all of the economics.

Build equity with commercial real estate

Equity is the value of the owner’s share in a property. When you finance a large sale commercial real estate purchase, you’re borrowing the money from the bank and slowly paying the bank back. With each dollar you pay back, that much of your equity is growing. Think of it as the ultimate piggy bank, where every dollar you put in gives you a little more of the property. And if your commercial real estate property appreciates, that single dollar can end up being worth more than a dollar. As the value of your commercial real estate property increases over time, so does your equity.

No matter what kind of commercial real estate property you buy, real estate appreciation is usually a slow process. You’ll need to make a solid plan and account for potential problems.

Finance commercial real estate

Before you secure financing, it’s important to know exactly what you can afford and how much risk you’re willing to accept. Determine whether the rental rates can support the expenses of the property, including but not limited to the loan payments, taxes, insurance premiums, and repair and maintenance.

Pick the right commercial property

Before you can decide what kind of commercial real estate property you want to buy, it’s important to take into account your skills, ability, and the amount of time you want to put into it. If you can afford a 10-unit apartment complex but don’t have the time (or the stomach) to deal with 10 different tenants, then maybe a duplex is more your speed. If you’re a do-it-yourselfer, then maybe you can buy a fixer-upper and make more money by doing the work yourself.

While the value of commercial real estate property can be averaged over a large area, each market is unique. Spend some time walking around the neighborhood. What is the rent of other similar commercial real estate properties in the area?

Tax and investment goals

Consult an accountant and make sure you structure your investment to meet your tax and investment goals. There are many commercial real estate books available on halfvalue to help you learn more about buying commercial real estate property and how to make it work for you.

Once you know what type of commercial real estate you want, go to the Real Estate portal, click Commercial, and start searching for item listings on halfvalue.

• Finder: Use the drop-down menus on the Commercial Real Estate Finder to quickly narrow down item listings by State, Type, or Lot Size.
• Keyword search: Search halfvalue listing titles for specific words. For example, if you want to find an apartment complex, type "apartment" (without quotation marks) into the Search box. Click "Search title and description" to expand your results. Visit halfvalue's Search Tips page for more tips on searching with keywords.

If you can't find exactly what you want, try shopping halfvalue Stores,

The information contained in this Buying Guide is intended for general information purposes only. This guide is not intended to be a complete list of all things relevant to the purchase of real estate and should not be deemed a substitute for professional advice. You should conduct your own due diligence into all aspects of a real estate purchase and depending on your situation; you should get assistance from experts, including a licensed real estate broker, a property inspector, title/escrow company, attorney, and/or financial advisor.

Before moving forward with any real estate purchase, you’ll want to consider the following.

Real estate purchase specifics

• Price: Am I bidding on the full price of the parcel, or am I bidding on a down payment?
• Title: Is the title clear; that is, free of liens, easements, and other encumbrances? If the title isn’t clear, what are the easements on the property?
• Insurance: Can I get title insurance at my own expense?
• CCRs: Are there any covenants, codes, and restrictions on the property?
• Deed: What type of deed will I be getting?