Commercial Real Estate Lawyer Helping People To Buy Or Sell Property In Albany
Commercial real estate generally performs one of two functions. It is either bought to be occupied by the operator of the business in residence or it is purchased as an investment. In either case the buyer needs to be clear about exactly what they are buying for their money, the process they need to follow to complete the deal and most importantly, the means by which they will fund the purchase of the property. As with any form of investment, commercial real estate has both successes as well as failures. The points in the article below will show people how an Albany commercial real estate lawyer can help people who want to buy or sell property on the North Shore.
The most common way to find pieces of property, whether commercial or residential, is to talk to a commercial real estate agent They will know the different types of property in their area. They should also have a good understanding of the commercial value of a building be it a warehouse, office, retail outlet or a production plant. Their knowledge should include not just the probable price range but they will also be able to talk about the rental income a particular premise could generate. They should also be able to talk with confidence about the ease of letting or sub-letting that building. In short, they out to be able to have an informed conversation with any prospective buyer of the real estate in question so that the buyer can go away and work out the viability of it for their purpose, whether occupying it or leasing it.
It is important to remember that, however helpful the real estate agent might be, their loyalty lies with the seller of the property. The agent is also paid by means of commission which is a percentage of the final selling price. Therefore the agent is motivated to get the highest price possible for both the client and their own income. So while the agent may be very accommodating with your requests and questions, their intention is to sell to the highest bidder or the person who can close the deal fastest. So do not be fooled into thinking that they are on your side in the transaction.
How do you assess if a commercial property is a good investment?
This is a business transaction and as with all businesses, the best measure is the net profit that it can generate. The Net Operating Income gives the net income after subtracting the operating expenses from the rental income of a property. Remember to take GST into account. People often forget that they have to pay GST on the rental income and can have a nasty surprise when they have a sizeable tax bill to pay suddenly.
The future potential value of commercial property is of course another way that people look at valuing a building. This means they assume the increasing value of that premises but they key word here is “potential”. It is up to the buyer to make that assumption as no agent or property lawyer will give a binding opinion on any future value. An agent might suggest reasons that any building will increase in capital value but again, bear in mind that they are trying to get you to buy that building. Further that value can only be realised when the real estate is sold. So in the short-term, the net income is the best measure of the value of any investment property.
Often people wanting to invest in or buy commercial property in Albany know their intended financial outcome but need help in locating the right property to accomplish this. This is why a real estate agent adds value to a transaction since they should have plenty of local knowledge. It is possible to engage the agent on your behalf and pay them a finder’s fee. In this situation they would give you a tour of the most likely properties available in their locality. They would also be able to make contact with the owner of property to initiate a possible deal.
Most contracts for real estate in the Albany area, in fact for all of Auckland, use a standard agreement. This is handy since the main parts of the contract are well understood by any commercial real estate lawyer in Albany. However, your lawyer can recommend adding additional clauses to meet certain conditions to benefit you. This can include the payment method, time span and any remedial maintenance work that you might want carried out before you complete the deal.
Another advantage of using a broker is that you, the buyer, does not have to talk directly with the seller. This can be particularly useful if you want to negotiate hard on the price or additional conditions. The agent will want the deal to be completed so they get paid and so can explain to the seller why your demands are reasonable. The agent has plenty of experience in this type of negotiation so use their skill.
The Albany area is very active and attractive in the commercial real estate market. So you need to act quickly but at the same time you must also carry out your due diligence on any potential piece of real estate you might be considering buying. Once you have run through the numbers, or better still, have your accountant carry out some profit and cash-flow forecasts, then you need to talk to your lawyer. They will have to read through the contract to make sure there are no additional clauses which disadvantage you. They will also need to understand the leases that might be in operation as these will have to be transferred to your controlling entity.
There is a lot of work for a commercial lawyer in any transaction and often they need to act with speed so you can close the deal before another buyer. If you need an Albany commercial real estate lawyer then one of the biggest and most experienced is McVeagh Fleming. They have a team of specialist commercial property lawyers and know the Albany area thoroughly. They will also be able to give advice on how your deal compares to other similar ones in the locality.