Pros of Commercial Real Estate Investments:

Passive income: Commercial real estate will likely attract long-term tenants giving you a steady stream of passive monthly income.

Normal wear and tear is covered: Depending on the lease agreement, tenants usually cover the costs of normal wear and tear. In some cases, they also contribute in paying the insurance and property taxes.

Long term leases: Long term leases make investment portfolios much more attractive. Landlords should encourage tenants to sign long-term leases to ensure the stability of their business operations.  Incentives can be added to long-term leases to sweeten the deal.

Cons of Commercial Real Estate Investments:

Quick tenant turnover: Depending on location or industry, sometimes buildings can suffer from tenant turnover. Getting tenants who agree for long-term lease can be challenging in some situations. To prevent this problem, choose a location with stable business environment, where businesses typically rent a space for longer periods of time.

Refurbishments: When the tenant leaves, the landlord may discover that the unit needs extensive refurbishment. To prevent this problem, make it clear in the lease agreement the property’s intended uses.

Zoning: Zoning can be a big headache for many landlords. An area may be zoned for manufacturing, retail and residential areas. It can be a problem if after new zoning is implemented, you need to change the purpose of your commercial property.

Taxes: The tax man has his hand in every commercial real estate property. As value of the property skyrockets, the owner will pay more taxes. It can be tricky trying to raise the rent, because the turnover can be high when rents become too expensive.

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Before you begin your commercial property search, it is important to understand the benefits of owning a commercial property.

Commercial properties can include retail buildings, office buildings, warehouses, industrial buildings, apartment buildings, mixed use, commercial land or self-storage buildings.

Benefits to Buying Commercial Real Estate

     There are many benefits to buying commercial property in Massachusetts, but the most important is the income potential of these properties. The typical annual return on a commercial real estate property can be up to 12% higher than with residential real estate. Lease terms are also typically longer with commercial properties compared to residential and much of commercial property ownership is “hands off” – meaning that the property owner has little to do with commercial property expenses directly.

Now let’s look at some strategies that will help you choose the best commercial property for sale in Massachusetts.

Know How to Spot A Good Deal

You should know how to recognize a good deal and a good investment property. This means knowing your market, knowing your competition and having the ability to walk away from a deal. You should be able to walk through a property and quickly make an assessment of the damage, any repairs needed and just how much risk the property involves.

Watch for Motivated Sellers

Motivated sellers typically mean good deals. They are ready to sell, and they are willing to make a deal. When they are motivated to sell, the negotiation process will be much easier, and you could save big money.

Know Your Market

Knowing your market means immersing yourself in it. Visit the area, have lunch at a local restaurant, shop locally and drive through the area at various times throughout the day. Talk to the neighbors and get a feel for the area. You might find out about vacancies that aren’t listed yet and get a jump on the competition.

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Typically, an abandoned property is bought “as is” and this can mean that it can become more of a loss than a profit. While abandoned industrial properties in Massachusetts can be purchased at a discount, there are factors that investors should consider.

Electrical.  Electrical wiring must be up to code if you are to use the building. This can be a large expense as some buildings may require new wiring throughout.

Plumbing.  Another common factor that investors should consider is that many of these abandoned buildings have older plumbing which could have rusted or broken. Sometimes, the copper plumbing itself is stolen from the properties which can add up to an expensive bill to replace.

Structural deterioration.  The older the building, the higher the chance of structural deterioration. Be sure to have the building thoroughly inspected including the walls, ceiling and flooring for any rot or mold that could have come from water damage. Assess the cost of these damages before you make a purchase.

Asbestos.  Asbestos has been banned for use since 1977 but it does still exist in many homes and commercial properties throughout the country. Asbestos can cause a form of lung cancer and it should be removed before anyone is allowed entry. Many older commercial buildings might still have asbestos in the walls and ceilings.  Removing it can be a large expense.  Factor asbestos removal into your equation before purchasing a property.

Back taxes.  In some cases, a building may be abandoned due to unpaid property taxes.  Back taxes become the responsibility of the new owner.  Contact the local tax assessor before purchasing any abandoned industrial property.

Condemnation.  When properties are condemned, potential investors should contact the local planning commission to find out why. It could be something minor that needs repaired to bring the property up to code, or it could be something more involved that could become expensive.

If you are considering owning abandoned industrial property in Massachusetts, contact Sovereign Realty Advisors and speak to a Massachusetts property investment expert today.

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What Are Mixed-Use Commercial Properties?

The definition of a mixed-use commercial property is “a multi-use, multi-purpose building that physically and functionally provides space to integrate commercial, cultural, institutional and industrial uses.” That means a building could have retail shops on the first floor and offices or warehouses on the second floor and above.

From gaining more exposure for your tenants’ customers, to easier code compliance, the benefits of mixed use commercial property are numerous. Let’s take a look at some of the benefits that mixed use commercial property in Massachusetts offers both investors and their tenants.

The one main factor that makes mixed use commercial properties in Massachusetts so attractive for investors is they offer a wide range of possible uses. This makes them easier to lease to small business owners who are considering purchasing a property for their business but can quite afford it yet.

Here are some of the ways that you can use a mixed-use commercial property in Massachusetts:

Studio/light industrial.  This is the most popular option that many investors choose when purchasing a mixed-use commercial property. Studios and small workshops are an important part of any urban scene and they can draw high dollar tenants.

Retail district retrofit. A popular trend is to retrofit commercial space, giving it a village-like appearance that enables it to blend in to suburban retail areas.

Neighborhood commercial zoning. This can include convenience stores, cafes and small restaurants.

Office convenience. Small to medium, even enterprise level businesses can lease office space in mixed use commercial buildings.

Office/residential. Some mixed-use commercial buildings are zoned for residential use as well and that can mean offices or retail shops on the ground floor with apartments or condominiums above them.

Parking structure with ground-floor retail. Urban areas can always use more parking and this can be an easy solution for investors wanting to profit quickly from their investment. With retail shops on the ground floor and paid parking above, investors can easily double their profits while providing less property management on the parking structure than what is needed for the retail level.

If you are considering mixed-use commercial property in Massachusetts, contact Sovereign Realty Advisors and speak to a Massachusetts property investment expert today.

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Quality service is a concept that can be quite useful in the Massachusetts property market as more and more people are renting homes and landlords are expected to provide more features, more amenities and more service than ever before. In the past, the only contact a landlord and tenant had was when paying the rent or when there was a problem and maintenance was needed. Today, by creating stronger landlord/tenant relationships, we can also have better communication between the two and that can lead to a better experience for everyone.

Ways A Landlord Can Create A Better Relationship with Their Tenants

Engage with your Tenants- by addressing tenant needs and ensuring their satisfaction, landlords can learn a lot about the particular business and how to improve the space they provide. Improved service can lead to increased income, decreased tenant turnover rates and a more proactive landlord/tenant experience.

Be Dependable- being trustworthy and dependable are two ways that landlords can strengthen the landlord/tenant relationship and have more satisfied tenants who are more willing to renew their leases. If you tell a tenant that you will do something, be sure to do it and don’t put it off. Owning and renting a property is a business and it should be treated as such.

Communication- proper communication is important to a successful landlord/tenant relationship. Making sure they understand your rules and that you listen to your tenants and accept their suggestions is as important as the service you provide.

By engaging with the tenant, being dependable and having proper communication, you will not only grow the landlord/tenant relationship, but your business as well. Satisfied tenants usually renew their leases which means less vacancies and more profits. Also, you can get some effective word of mouth advertising from your satisfied tenants when one of your properties does become vacant as they will be more likely to recommend you to their friends and family.

Contact Sovereign Realty Advisors

To learn more about creating stronger landlord/tenant relationships in Massachusetts, contact Sovereign Realty Advisors and speak with a residential property expert today!

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If you are looking for ways that you can build relationships with your tenants, keep reading as the experts at Sovereign Realty Advisors are going to share some useful tips that can help you do just that!

Ways A Landlord Can Build Relationships with Their Tenants

Offer Fast and Dependable Service- when a maintenance issues arises, don’t put off repairing the problem. This will not only lead to unhappy tenants, but it could also lead to more damage the property itself. Fast and dependable service can lead to fewer vacancies and the opportunity to make more profits from your income property.

Be Proactive- by being a proactive landlord, you will know about any issues with the home or your tenants before they become problems. This will also show your tenants that you care about their needs and that you are accessible.

Help Your Tenants- from providing the tools and tips to maintaining the property, to helping new tenants find local movers, internet companies and other service providers, landlords can help make their tenants’ rental experience much more successful and that can lead to happier, more satisfied tenants, fewer disputes and decreased vacancies.

Be Transparent- transparency is key when building a successful landlord/tenant relationship. If you are considering increasing the rent or any fees, be sure to inform the tenant ahead of time. Likewise, if you are considering selling the property, communicating this with the tenant is important.

Communicate- communication is important in any relationship, especially the landlord/tenant relationship. Understanding your tenants needs and your tenants understanding yours can create a much more effective landlord/tenant experience for everyone. Don’t be afraid to contact your tenants from time to time to see how they are doing.

Take a Hands-on Approach- being available when your tenants need you and making minor repairs yourself will not only build a stronger landlord/tenant relationship but save you money as well. Taking a hands-on approach to property leasing is important to creating a strong business.

Contact Sovereign Realty Advisors

To learn more about creating stronger landlord/tenant relationships in Massachusetts, contact Sovereign Realty Advisors and speak with a residential property expert today!

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