Commercial property includes industrial property, office buildings, medical centers, malls, hotels e.t.c.
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In this article we are going to discuss the advantages/benefits of investing in the booming commercial real estate market in Los Angeles.
Professional relationships. In most cases, small business owners usually take take pride in their businesses and thus want to protect their livelihood i.e their businesses. The owners of commercial properties are usually not single individuals, but limited liability companies which operate the commercial property as a business, thus, the tenant and the landlord have a more of business to business relationship. This keeps the interactions between the two courteous and professional which helps keep interactions professional and courteous.
Public eye. Retail tenants have a strong interest in maintaining their stores and storefront. This is because if they don't, it will greatly affect their business. As a result, property owner interests and commercial tenants are aligned. This helps the owner to improve and maintain the quality of the property and thus increasing the value of their investment.
A high income potential. This is the best reason to invest in commercial real estate over investing in residential rentals. Commercial buildings generally have their annual returns off the purchase price between 5% and 13%. This greatly depends on the area. This rate is higher compared to the rate that exists for home properties i.e (1% to 5% at best).
Limited hours of operation. Most businesses usually close and the employees go home at night. This means that you work when they work. When they are not working, you are not working too. As the landlord, you can be able to have a peaceful night of sleep as you will not be disturbed by occurrences such as midnight calls in case a tenant has a problem. For commercial buildings, it is very likely that you will have an alarm monitoring service. In case something does happen at night, your alarm monitoring company will go ahead and notify the proper authorities.
Commercial properties have more objective price evaluations.
It's is easier to evaluate the valuation and prices of commercial real estate. This is because you can simply request the current owner's income statements and determine what the price of the property should be based on the income statements. If the seller of the commercial property is using an experienced knowledgeable broker in commercial real estate, then the asking price should be set at a price where the investor can be able to earn the area's prevailing cap rate for the commercial property type that they are looking at be it office, retail industrial. Mostly, residential properties are often subject to more emotional pricing from the seller due to the attachment that he or she has towards the property.
This are just but a few of the many pros of investing in commercial real estate more so in a major city such as Los Angeles.
Although the global economy is slowly revitalizing the overall real estate market isn't in a very good situation but there are a few locations in the world that are an exception. These exceptions aren't affected much by the current economic crisis as the desirability of these locations is at a very high level. Depending on every individual's personal situation and contributing circumstances, there is always an advantage to buying a property in this little piece of heaven. This is surely a good time to buy a property in Hawaii for at least these four main reasons:
* The interest rates are still low thus making mortgages affordable;
* Most importantly , the property values are down so this is a great time for a good deal;
* There are unique properties available unlikely to become available again anytime soon;
* Think about it, it is a home in Hawaii, what could you want more?
This moment or any other moment is a great time to buy real estate in Hawaii as the location is purely exquisite, the weather is great, the lifestyle is let's just say "casual" and most importantly, "thanks" to the crisis, the Hawaii real estate prices are significantly lower in comparison to the period prior to the global economical difficulties. Some of you may ask why the prices are down during this difficult period. The answer is quite simple: most people are afraid of making such an important investment in Hawaii real estate now so not many people are looking for purchasing a new home. For this reason, many Hawaii real estate agents offer a lot of homes for sale that aren't purchased by anyone. So, what can they do to sell these homes? Simple, the sellers have to lower the price in order to make the offer more desirable. That is why in some areas, the sales have already gone up thanks to these prices cuts.
A realtor by the name of Mike Gallagher made a very comprehensive study that reviews the progress of the Hawaii real estate price market between June 2008 and June 2009. The result of the study was that in Kapolei, the sales increased by approximately 14%. The main reason for this increase is because a very large number of first time home buyers have been choosing the Kapolei area for their first home. This 14% increase is a direct result of the implication of the City and County of Honolulu as well as the Federal Government. The City & County started a campaign in which they promoted Kapolei as the "second largest city" of Hawaii. The Federal Government made an 8.000 U.S. dollar tax stimulus for first time home buyers. With all these benefits, the likelihood of even more bigger sales in the upcoming future is quite high.
All things considered, the Hawaii real estate market is going through some major changes but regular people that are looking for a property in this location can purchase a home at a very good price now, a price that doesn't come very often. Real estate experts strongly edna resort mui ne advise future home buyers to look thoroughly for the right home and of course, at the right price, this is the time to purchase, despite the current economical situation.