Tuesday, June 27, 2006

Small Office Buildings Can Be Your Potential Source Of Real Estate Wealth. Why?

Author: nicker
Category: Commercial Real Estate

Office properties can be bought by you with better financing than residential properties because there are fewer buyers for office buildings. Hence, sellers are more creative in the unique financing options they offer buyers - namely you.

Office properties usually give owners fewer problems than residential properties. Why? Because office properties normally have only dult tenants. There are no children or pets to cause a variety of nuisance complaints and woes.

Office properties can have leases written such that the first $1,000 (or any other agreed-on amount) in repairs are the responsiblity of the tenant. This reduces the number of small-repair calls you get, allowing you to have a quiet life with your office building real estate holding.

Office properties may be the only type of real estate to invest in when you want to own real estate in an area where there are few residential properties. Hence, officies become “the only game in town”. Yet they can be just as profitable and more hassle-free than residential properties.

Take these three easy and quick steps to find suitable office properties:

  1. Look around your area to see if there are office structures rented to businesses. In most urban (non-city) areas, such structures will be one- or two-story buildings with a parking area in front or on one side and a tiny backyard for tenant services - trash removal, minor storage, or others.
  2. Contact local real estate brokers, asking for listings of office properties in your area. Such listings will be sent to you free. Be sure each listing gives the Asking Price, Down Payment, Income, and Expenses. You must have these numbers.
  3. “Work the numbers” for each property. You MUST have a Positive Cash Flow from each property! As a starting guide, look for at least $500 per month PCF for each office building you buy depending on the size and location of the property. A large monthly PCF is - of course - welcome and desirable.

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