Commercial land may be a good investment for those who understand the purchasing process. Although some investors buy commercial land and hold it until the value of the property increases, there are other ways to make a profit as, for example, build your own business on that plot or to sell it to developer. Commercial plot is a great investment though you should make thorough research.
If you are planning to buy a commercial plot you have to consider what to keep in mind while buying this kind of property very carefully. The commercial plots need a lot of analysis and prior research work as it may greatly affect your business. In order to avoid financial loss, you have to evaluate the location, convenience and viability of a particular plot of land.
Instructions:
1. Approval of a Business Loan
It is very different practice to obtain finances from getting a loan in order to buy a commercial property than buying a personal residence. You will have to contact a commercial lender that deals with business loans though they will ask you to provide confirmation of the land's market value, approval of the commercial zoning and a present survey of the land among other items before the loan’s approval. This kind of loan will also be financed at a higher interest rate than the other type of loans. You should also have enough money for the down payment of the land and this can be around 20%.
2. Contact an experienced real estate broker or an agent
In order to find a good commercial property it may be a good idea to contact an experienced real estate broker or an agent as they know how to assess the land’s value and can provide assistance throughout the closing process. They are usually connected with commercial real estate community and all the properties for sale. The real estate broker may also assist you with property taxes, zoning regulations and the environmental tests when you buy commercial land.
3. Property Research
Get valuation of the land before making an offer. This factor is very important because it will show whether your investment is wise or not. Valuation of the land is usually provided by a real estate appraiser. Find a reputable appraiser experienced in handling land appraisals and provides accurate and detailed reports.
Another important report you should consider is an environmental assessment or audit. Most probable your lender will require you to have the soil tested before they will approve your loan, though this assessment may also prevent from purchasing a property that might have contaminated soil.
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