Increase the Sales Price of Commercial Real Estate
August 10th, 2007 Posted in GeneralThe major value indicator of a commercial real estate property is the net income it yields after deducting all the expenses for running it. In other words, if to increase the price of a commercial property for sale, the owner first needs to ensure that the said property would produce a nice return in the first place. There are a couple of ways to achieve this - such as hiking the base rent per unit and cutting down on the overall expenses.
Hiking the base rent might make the land lord a less liked individual, but doing so in a commercial property in a prime area, by as much as 2.5%, could give an increase of few thousands of dollars in terms of overall income. However, this is something that has to be done with due risk analysis for tenants could leave the building if they feel that the rent hike lacks any reason. If that happens, the effect will be the reverse of what was desired.
Another positive way is to reduce the expenses by some effective planning. This can be achieved by reducing electrical/water usage, giving the cleaning bid to the lowest bidder, cut on advertising costs, write gas/heating costs as owner responsibility, use decorative stones instead of grass in yards etc.. It is also a good option to seek the help of a professional Certified Professional Accountant to save taxes and other fees.
