It is every buyer’s worst nightmare: the commercial property that seems great either on developer’s brochure or in its physical form turned into a disastrous deal not long after the ink dried on the sale agreement.
A grand property purchase that ends up going south could be challenging for both buyer’s portfolio and self-esteem. And even though time will teach you to perceive such too-good-to-be-true commercial property for sale from a mile away, there are 5 signs a buyer can look for and identify a bad property project without losing skin all the while.
Here are a few signs that only an expert can catch about the bad property deal-
1) Problematic Property — A bad property may appear to be fine at first look, yet call an expert and you might end up finding troubling facts. Good property at a location where the neighborhood is short on basic amenities, hospital, low traffic estimates, zoning changes that allow the re-route of a major highway or allow an airport to be built can be challenging to your Net Operating Income (NOI).
2) Bad Area — Exploring the area to trace the property trends will ask for a major footwork. Nevertheless, spending a day or so in the company of an expert and investigating the owners and tenants could save you from investing in a property at a place that is gradually biting the dust, or plagued by increasing crime rate. Other factors that need equal attention are — rising property taxes, an increasing number of rentals, public transportation being scaled back and malls moving to the next neighborhood over. Stop thinking about waiting the trend out — you won’t last 20–30 years, it may take to reverse the course.
3) Managing the Numbers — Real estate industry is all about numbers, owing to this critical nature of the industry, there are many online tools crafted by the industry leaders that help the buyers in adding up the numbers. Just enter your estimate and you will achieve an estimated Net Operating Income. Be that as it may, if the numbers don’t look great even after you’ve put in a few of your best estimates, do not ignore and just assume that the investment would be a hero by being overly optimistic about rentals, undervaluing expenses, tenant vacancy or another critical factor. Instead, start investigating for a new profitable property.
4) Unreliable Numbers — It’s anything but difficult to accept that the numbers given by the seller are correct, especially when a property agent or any other middle-man is involved in the deal. Thus, it is quite common that the seller somehow ‘twist’ the numbers so as to make the property look good. To maintain a strategic distance from this situation, investigate the numbers and take help from a professional and get it vet. Try not to depend on projections. For instance — if the reseller or a property agent says that rents will rise in the near future or there is a drop in the tenant vacancy — investigate the details and verify if the number data offered is accurate or not. Taking the help will ensure that not only the projections are being questioned, but careful observation will reveal from where every penny is coming in and going into.
5) Property For Sale For Too Long — Commercial properties are consumed fairly quickly. Despite the fact that demand for a particular property might fluctuate, get details from an experienced source, whether the property you are planning to invest in has been on the sale list for too long. These professionals have expert footwork and they will get the detailed information on why the property is available for so long; there might be some serious issues that the seller might not tell you about.
Investing in a commercial property is more complicated than any other property type, however taking help from industry leaders or selected a reputed property like Anthurium will help you achieve the best property portfolio. Talking about Anthurium, it is the property that has everything an investor can ask for — work solace, extravagance, shopping, etc. Anthurium is the most renowned upcoming commercial project in Noida. It is not only about talk, it is about action; action for investment, action to book returns