How to Invest in Commercial Real Estate
November 2, 2009 by Customer Care
How to Invest in Commercial Real Estate in Des Moines by Des Moines Real Estate Experts RE/MAX Real Estate Concepts
Investing in commercial real estate in Des Moines is a daunting task that requires lots of forethought, research and planning. Here are some tips to make investment in commercial real estate in Des Moines, Iowa correctly so as to obtain a sound compensation on the investment.
Tip #1- Before investing in commercial real estate you have to assess how much money you have for investment purposes and calculate the minimum returns required from this investment to make it profitable for you. Based on the amount of returns needed you can choose between the two types of investments being value-driven investments and value-added investments.
Value driven investments carry lesser risk because they contain stable leases with periodic rental rises. Their returns range from 6-14%. Value added properties are more risky so their returns in the long run are also higher ranging from 12-25%. A mortgage calculator will help you make calculation relating to real estate concomitant expenses such as third party fees and tenant improvements.
Tip #2- The next step will be to appoint a real estate agent in [Profile.market]. Choose a real estate professional who has plenty of experience, can persuade clients well with communication skills and who is affordable and trustworthy. He should be one who is ready to hand lead you through the investment process. He should offer services like linking you to your attorney and bank’s attorney and removal of bottlenecks.
He should also refer you to a real estate attorney and an accountant for ensuring that the terms of the investment contract are buyer beneficial. The agent will also be able to help you get a loan by making your deal look more alluring to lenders. He will be well versed in the essence of a real estate transaction. Don’t hesitate to hire a good real estate agent due to his costs as you can always recover these costs from the returns on your investment.
Tip #3- When you set out to invest in commercial real estate in the Des Moines it is best that you take maximum advantage of real estate leverage. This implies that it is worthwhile to borrow the major part of the money available against an income generating commercial property. This will give you many additional percentage points on your loan. You can take the help of a real estate professional in Des Moines to submit a deal for a quote and generate a quote; programs for financing commercial investment properties are abundantly available.
There is a lot of free information available to you about buying, selling or investing in Des Moines real estate. For complete information about the Des Moines real estate market including current homes for sale, property values and more please visit the most complete website online dedicated to everything Des Moines real estate at Real Estate with RE/MAX. Please feel free to contact us with any of your real estate or mortgage related questions and we will be more than glad to answer your questions. Call us at 1-800-708-5890 or email us at dsm@realestateconcepts.net.
Filed under Des Moines Real Estate Blog
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