One day for lovers, Valentine’s Day falls on 14 February and is observed by couples worldwide.
Says Wikipedia, “It originated as a Christian feast day, in which a martyr called Valentine and the later folk traditions, it has also become an important cultural, religious and business festival of romance and love in many regions of the world.”
And here I thought it was an excuse to fill my face with chocolate and the esoteric messages on their sides with those cute little -heart shaped candies. but I digress.
As I have considered Valentine’s Day, my thoughts turn to commercial real estate and the similarities I can draw. here it goes.
Do you love your commercial real estate holdings?
I was taught early in my career so that buyers could help buyers in divorce (forgive) in a sense of ownership of commercial real estate.
By this, I mean that your decision to buy or sell numbers should guide – not your feelings. It reminds me of a owner who I met, who was the owner of a freestanding single-tenant building in Anahem.
The owner was a builder and built this holding. Whenever a vacancy was pending, I was engaged to become their agent.
Every three to five years would have to crawl in panic because he knew that his cash flow would soon stop, and he would be forced to withstand a dry magic. Their conversation was reduced, and he ended with some sketch residents. All because someone, anyone needed, to pay rent.
More than serious objections – ultimately, this was his child – I assured him to sell a living building and trade income in a building with several tenants.
My principle was that even if you lose one or two living people, you still had the money to pay the bills – not in the light switch of the same tenancy and not closed. Unwillingly, he agreed. He will tell you that he had taken the best decision ever! He now owns three such buildings and enjoys a great retirement.
Send a valentine to your tenant.
The new year is in full swing and is a good benchmark to eliminate the old business and start a new business. Many zamindars incorporate last year’s expenses with their tenants in February.
The end of the year is concrete in the rear-verse mirror and the first quarter is half.
If you create your operational expenses such as property tax, construction insurance and maintenance annual budget, you will need to create some beliefs. Now when the correct cost is known, you can bill your resident for underpayment or credit for overpers.
Other property taxes are going to be done in February. Send to your payment this month. County evaluator will love you for this.
Negotiation, agreement, commitment
In commercial real estate deals and romantic relations, interactions and compromises are important.
Whether it is interacting on the terms of the lease or compromising to go for dinner, the ability to find common land is important. Commercial real estate investment often involves long -term commitments similar to commitment involved in a serious romantic relationship. Both require careful consideration and planning for the future.
You marry commercial real estate. You date the interest rate.
For those of you who are slightly concerned about interest rates these days, do not forget that once the interest rates can be restored at a more favorable level, your deal can be refinance.
Focus on the basis under which you acquire buildings. By this I mean you pay.
If you can separate your feelings, as discussed above, and instead focus on the income-producing capacity of a commercial real estate, you will do a smart shopping.
Alan c. Buchanan, SIOR, Orange is a principal with Li and Associates Commercial Real Estate Services. Can be reached on it [email protected] Or 714.564.7104.