Austin Kerr | How to Invest in Commercial Real Estate

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Real-Estate-Investment

All the studies show it, investing in commercial real estate favors higher profitability than an investment in residential rental real estate, but it must be done with discernment. In this article, Austin Kerr will examine the questions that can be asked by an insecure person before committing, both from the angle of a buyer and of a tenant.

IDENTIFYING THE BEST LOCATION

Before launching your project, you must ensure that the location of the room is suitable for substantial attendance. An insightful trader will first seek a space in the city center, in pedestrian areas, frequent gathering places, public transport surroundings, proximity to stations, etc. The main shopping arteries, which are usually referred to as “No. 1 locations” are the most expensive, but guarantee, a substantial turnover, therefore a potentially attractive investment in the long term.

After determining the premises, if he heads for the rental, the merchant enters the negotiation phase with the owner.

COMMERCIAL LEASE

The commercial lease is defined by the Commercial Code (“UCC”). It is a contract derogating from ordinary law, but nevertheless meeting specific criteria. The lessor and the lessee must agree on the essential points, namely the designation of the premises, the authorized activities, the amount of the rent and the duration of the lease.

If certain essential elements do not appear, the said contract may be declared null.

PURCHASE OF COMMERCIAL PREMISES

You can also sign up as a local owner. The investor can then undertake research on dedicated sites or request the assistance of firms specializing in investment support in commercial real estate. According to Austin Kerr Some people find it clever to acquire a property with one or more commercial premises on the ground floor, which allows them to diversify their real estate assets.

BECOME A PURCHASER OR TENANT?

In the end, when you want to invest in this real estate sector, you have to ask yourself if it is more profitable to buy the premises or to rent them.

Each possibility suggests advantages and disadvantages, disparities notably in legal, financial and fiscal terms. The temptation to rent is strong because the initial cost is lower, the development faster while allowing mobility in the event that the profits are not as expected.

It is the choice of caution. But buying offers the opportunity to build wealth. Lower interest rates and a long-term vision can convince an investor of the relevance of such a commitment. Taxation also gives him the alternative of pledging his real estate in order to obtain liquidity, recovering VAT if he buys new premises, deducting loan interest from his taxable profit, etc.

Investing in commercial premises opens up a whole range of possibilities, but requires careful analysis of the project in order to identify the solutions best suited to our desires and ambitions. Commercial real estate remains relatively unknown to savers. However, if you want an investment offering good performance, there is an interesting solution. More profitable than residential real estate, investing in commercial real estate can prove to be more profitable and less risky. Investing in your own walls is one of the possible investment choices. 

However, making an investment with Austin Kerr will allow you to limit the risks linked to the constraints of managing the property or the poor choice of commercial premises while obtaining attractive returns.

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