Commercial real estate: we evaluate the object correctly

Today, most people are concerned about any financial transactions: should they invest in real estate now? Is it profitable? Opinions differ. Meanwhile, investing in commercial real estate is perhaps the most reliable form of saving and investing money. 

The very definition of "commercial real estate" says that the object makes a profit.

But many buyers, considering this investment option, make the same mistake: they evaluate the object in relation to its value to rental revenue. Moreover, the so-called payback period is taken as the main criterion, and, receiving a figure of 10 years or more, they refuse the premises, which in fact is very attractive for investment. 

How to choose a commercial real estate object correctly? 

At the first assessment, it is recommended to pay attention to the cost per square meter at a given time. Perhaps this is the main and main criterion. It is important that the price per square meter depends on the location of the object, the year of its construction and the availability of repairs. 

New buildings without repair. The cost of such premises today varies from 90,000 to 120,000 rubles per m2. But it must be taken into account — you will have to make repairs. Although it is possible that the tenant will make it himself during the rental holidays. In this case, the rental price will be reduced for the period of work, including costs. Such premises are rented from several months to several years. Because not every entrepreneur is ready to invest in repairs. The advantage for buyers will be a densely populated complex and the presence of a large traffic of people. 

The premises are renovated. These are objects in the "come in and work" state. Here, as a rule, the floor, walls and ceiling are finished. Communications have been carried out and plumbing has been installed. The cost varies from 150,000 to 200,000 rubles per m2, taking into account the quality of the repair, its freshness and wear. The rental period depends on the availability of potential visitors to the facility and takes from several weeks to several months. 

Premises with a tenant. The owner has already done all the basic work: bought or built a building, made repairs, attracted tenants. Thus, having paid for all this work, the buyer will be able to immediately receive passive income. 

Before buying a ready—made rental business, it is recommended:

— to estimate the cost per square meter;

— to consider in detail what repairs are made in the room;

— to find out what kind of tenant the object has;

— to familiarize yourself with the lease terms;

— to take into account how the increase in the rental price is provided in the contract.

So, the income from rental revenue today is far from the same amount tomorrow. Remember, you can raise the rent — this time. The contract must specify the indexation of the rental cost — these are two. And most importantly, there is always room for bargaining. Rest assured, in negotiations where a real estate agent acts as an intermediary, it is considered normal to offer and argue your price for an object, or to listen to the seller and his arguments. As a rule, there is always a golden mean and a deal is made.

 

With the wishes of profitable investments,

Krutko Anatoly Sergeevich

Commercial real estate market expert

"Maralin Ru"