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Last Updated: May 14th, 2012 - 22:24:01 |
Commercial mortgage leads show entrepreneurs buying larger and larger tracts of investment properties. Yet, the old adage is still true: Location, Location, and Location.
Whether you are searching for an investment, property in the booming Florida mortgage market; or, you are buying in the Lone Star Texas mortgage market; either way the profits typically are enormous. Average prices for industrial investment real estate rose 21% in the year 2004. So says the firm Real Capital Analytics of New York. Retail investment properties and Office buildings became more expensive, also, gaining 14% & 6%. Now, in the beginning of 2005, smaller investment property rose 10%.
Whether you should buy commercial mortgage investments now depends on the needs of your business and on your local market. The risk of prices declining is highest in markets that are now hot and could one day peak out; such as California, New York, and the Southern Florida area. Among the cities boasting the best mortgage rates per square foot include Austin, Tex., Cleveland, Atlanta, and Baltimore.
You can monitor your local commercial mortgage leads & brokers' listings at www.loopnet.com, which lists commercial investment properties for sale nationwide. Grubb & Ellis also presents free news for you on 50 office markets and 35 industrial markets on www.grubb-ellis.com.
As for specific “Locations” worth, your local commercial real estate brokerage should be questioned. If you are buying land investment to build your commercial business from scratch, then “Location” is much more important than simply gauging the local traffic. True, the local shopping patterns, and the areas competition must be checked.
Yet more is needed. The areas property insurance costs, garbage costs, utility costs and the zoning laws must all be considered before buying a real estate investment on any corner, regardless of how prime the traffic seems.
Sure, buying investment real estate for your company has many benefits; such as, tax deductions and potential price appreciation. Yet once again, could the city that you choose be on the verge of a commercial investment properties pricing bubble?
"There is no evidence of a bubble” in commercial investment properties says Dan Fasulo, who is a director at Real Capital Analytics. "As long as the economy keeps moving, things should be fine." Still, as mentioned, ask your local real estate franchise.
Certainly, low interest mortgage rates make purchasing attractive. However if your business is growing rapidly and you purchase an investment property now, you might soon outgrow yourself and then have to sell. You will be burdened with transaction fees, and could lose money. Maybe buying a residential home mortgage might have been more profitable. Thus, once more, your real estate leads search must realize that a careful consideration of size is vital to the idea of “Location, Location, and Location.
If you own investment property that has appreciated, yet you do not fancy any move; then you should consider cashing out some of your profits by performing a sale-leaseback. That is when you put up for sale your investment property to another investor, then rent the same property space back from them at a lower rate. Of course, you will lose any tax benefits that owning had provided, but you will bank any gains acquired from the sale. Those could pay for your rent for quite some time.
Overall, whether you are buying an investment home, or you are going after the greater profits of some commercial mortgage leads; either way you can reap great profits. If you remember and pre-select, “Location, Location, Location.”
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