How to Manage Both Business And Investment

investment-questionsBusiness and property go hand in hand. Your business buys a property to sell products from and conduct business. Your business might use its money to invest in property. In most occasions, your business is going to be tied directly to a property.

When a business invests, it is trying to make the most out of its money. The benefits of investing are high – but any investment is a risk. Real estate investment represents the lowest risk despite market values and their highs and lows, investment in real estate is an investment in real, physical asset. The site can be used by the business, sold to developers or rented out to tenants. With the amount of money in businesses, a business can develop a real estate portfolio rather quickly.

However, businesses can fall into traps that a normal buyer or investor might not. Businesses could get overcharged, for example. Well, how do you know if you are? Well, you’ve got the information available to you! Simply access the history of sales in the area (and the pricing of the previous sale of the same site) to find what you should be paying.

If the property is at the same price as it was, or is selling for a similar price to properties in the area it is very likely that the property is at a fair price. If it isn’t, it is up to you to negotiate. Even if the price is fair, you should still be negotiating in business anyway to get the best price for your investment. You should aim for a low price especially because a business is going to be charged a high interest rate on a mortgage. Commercial mortgages are worth comparing for this reason.

But remember, there are still other things to think about when tackling property investment – namely the money you are going to sink into a property. When you purchase a property, it is highly unlikely that you will find a tenant overnight if you are looking for someone to rent the property from you.

The time spent looking for a tenant isn’t cost free though – the bank won’t delay in charging you – so you might spend up to six months looking for a tenant, meaning you will pay six months of fees without rent offsetting that cost. Many investors forget about this and find themselves short of cash in an instant – so make sure you have the funds to cover the long term in your investment.

If you’re a business and you don’t do your research, you could be set to get a bit more than you bargained for with investments – and it won’t be good. You’ll be saddled with additional costs that you did not account for and these will only grow. Things like tax, interest and regulation fees will be slapped on top regardless of whether the site is rented or not.

 

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