Lease or Buy? Your Business Property Decision In Adelaide Lease or Buy- Your Business Property Decision In A | Page 10

Ask any real estate professional about the benefits of investing in commercial
property, and you'll likely trigger a monologue on how such properties are a
better deal than residential real estate. Commercial property owners love the
additional cash flow, the beneficial economies of scale, the relatively open
playing field, the abundant market for good, affordable property managers and
the bigger payoff from commercial real estate.
But how do you evaluate the best properties? And what separates the great
deals from the duds?
Like most real estate properties, success starts with a good blueprint. Here's
one to help you evaluate a good commercial property deal.
 Learn What the Insiders Know
To be a player in commercial real estate, learn to think like a professional. For
example, know that commercial property is valued differently than residential
property. Income on commercial real estate is directly related to its usable
square footage. That's not the case with individual homes. You'll also see a
bigger cash flow with commercial property. The math is simple: you'll earn
more income on multifamily dwellings, for instance, than on a single-family
home. Know also that commercial property leases are longer than on single-
family residences. That paves the way for greater cash flow. Lastly, if you're in
a tighter credit environment, make sure to come knocking with cash in hand.
Commercial property lenders like to see at least 30% down before they'll give
a loan the green light.
 Map Out a Plan of Action
Setting parameters is a top priority in a commercial real estate deal. For
example, ask yourself how much can you afford to pay and then shop around
for mortgages to get a sense of how much you will pay over the life of the
mortgage. Using tools like mortgage calculators can help you develop good
estimates of the total cost of your home.