Posts Tagged ‘Real World’

Are you somewhat confused by all the terms that real estate agents throw around like nothing?

Well don’t worry, I can assure you that you are in good company.

Lets get a few of the basics out of the way and then we can move on to some of the specifics.

One of the first things you have to understand is that there are several components to the overall rental rate that you ultimately end up paying. There is the rent that you pay the Landlord for the use of their space, but also as a commercial Tenant you will also pay for the following items; the maintenance of the overall building, the property taxes, building insurance and management of the property. (I know, I know, it doesn’t seem fair to be paying for the management and maintenance of someone else’s property, but that’s the real world, so get used to it!)

There are basically two types of rents that you will be quoted when searching for commercial space.

They are Gross rents and Net rents. They are two separate ends of the spectrum of what is included in the rent. Gross rent is an all in rent. A true Gross rent includes all of the above mentioned expenses (Property taxes, insurance, maintenance, management, utilities etc. etc.) and any other expense that might be particular to a specific property.

Net rent is a type of rent that includes nothing extra. Net rent is simply the amount that you are paying the Landlord for the right to use their space for a specified period of time. In a single tenanted property the Tenant simply pays for all additional expenses themselves. In multi tenanted properties such as office buildings or multi tenant retail malls the Net rent is commonly accompanied by Additional rent (Also called CAM/Tax which stands for Common Area and Maintenance plus Property Taxes).

The Additional rent covers the expenses mentioned above. The Additional rent is usually an estimated amount based on the previous years operating expenses. The total expenses for the property are added up and then divided by the rentable square footage of the building. The expenses are then allocated to each tenant proportionally to the amount of space that they have of the building. So if a building has 10,000 Sq Ft of rentable space, and a tenant has 1,000 Sq Ft retail store, then they would pay 10% of the total expenses. The Additional rent is quoted on a per Sq Ft basis as well.

In different parts of the country the rents may be quoted differently. In Winnipeg the rents quoted are usually quoted as a price per square foot per year. In other parts of the country they may be quoted as price per square foot per month. When in doubt, ask.

About the Author:

Harry Logan is a Commercial Realtor with RE/MAX executives realty in Winnipeg, Manitoba, Canada. Harry represents Buyer’s & Seller’s and Landlord’s & Tenant’s in all aspects of Commercial Real Estate including the Leasing and Sales of Retail Shopping Centers, Apartment Blocks, Investment & Income Producing Property, Industrial & Warehouse Space, Office Leasing and the Sale of Businesses.

He can be reached at 204-667-SOLD (7653) or through his website at http://www.WinnipegCommercial.com

This is not intended to be Legal or Tax advice. Please discuss these ideas with a competent advisor.

Author: Harry Logan
Article Source: EzineArticles.com
Electric Pressure Cooker

In the investment property industry, it is a common story shared about the new property investor that thought he had done the right research on his investment home only to find that the investment homes he had been comparing were not of similar specifications and the consequence was that he lost out financially in a big way. There are four key features that your research must assess before you take the step in purchasing your next investment home.

All investors can be prone to making poor decisions and suffering a financial loss, but you can avoid this by simply researching the investment markets and the properties you are interested in.

Not only do you need to take the time to research (research ……. and then research some more) every potential property, but you must ensure that your research is comparing ‘apples with apples’.

Once you have decided on the appropriate estate for your investment, the most important facts to check are the building specifications of every potential investment property.

Key Issue 1: The most obvious issue that you need to be aware of are the size of the block of land and the square meter area of the investment house.

Advertising descriptions need to be read carefully and all aspects of the advertising carefully analyzed and understood to minimize confusion. Let us take two real world examples and assess what they are offering:

HOUSE A:
Bellevue Estate – $430,000
Location – Lot 21 Grandview Drive

This expertly designed 200 m2 home on a 720 m2 block in the Parklands Estate is an ideal family home. With an outstanding family room and an additional alfresco dining area off the family room, this will give your family lots of living space.

HOUSE B:
Bellevue Estate – $400,000
Location – Lot 30 Petite Court

All hands up who want a massive 15 sq m outside dining area. If you live in the tropics, then who wants to live inside. This spacious 184 m2 home, situated on a 460 m2 block, is designed with this fantastic outside dining area, this is the Number One tropical home for the family.

Q1. Do These Descriptions Describe The Same Investment Home?

Q2. Will both of these Investment Homes Offer The Same Rate of Return?

Q3. Do they contain the same Features?

Well in reviewing the two descriptions you do find that they have common factors:

They are both in the same estate and have four-bedrooms, a main bedroom with ensuite and a double car garage, but these properties have very different rental appeal and financial growth potential.

When comparing these two properties and taking into consideration that one is a 200 sq m house on a 720 sq m block, priced at $430,000 and the other is a 184 sq m house on a 460 sq m block, priced at $400,000 – it’s easy now to see the REAL value!

Yes, it may cost you $30,000 more but look at the extra land value and house space you’re getting with HOUSE A compared to HOUSE B!

With this information on board, it is up to you to decide on your price point and investment philosophy.

I mentioned earlier there were Four Key Issues that you need to research when choosing an investment home and the First Key Issue was to look at the size of the property and also the size of the home.

Whilst there are many issues that need to be considered when choosing the right investment property, there are three other key issue points of comparison that should be considered and they are:

Key Issue 2: Assess the Nominal ceiling height – Be aware of the ceiling heights – do they vary. There is no industry standard and they can be from 2.5 to 2.7 meters. Building the ceiling heights .2 of a meter higher adds to the building costs and also to the aesthetic and practical appeal of your property to potential tenants.

Key Issue 3: Review the TURNKEY inclusions – this area varies a lot from building company to building company. Some of these are:

o Number of Power Points
o Number of TV points
o TV antenna
o Number of Phone Points
o Dishwasher
o Venetian blinds to windows
o Letter box
o Remote control garage door
o Automated irrigation systems
o Security Screens on windows & external doors
o Turf & landscaping
o Fences
o Sealed Driveways

Key Issue 4: Assess the Building & the Quality of the Fixtures and Fittings – The quality, guarantee and warranty vary greatly in today’s market. It is essential to ask the question and ensure that you always receive documented evidence of the guarantees and warranties provided by the building company.

With a home investment property, ‘added extras’ will translate to a higher rental return but always ensure to calculate the value of the extras vs the rental return into your financial planning.

Never rush into buying your investment home. Always take the time to consider all the factors impacting on you potential investment and this will ensure that you will make the right decisions on what to buy and improve your potential return on investment!

Chris writes articles on many issues and is available for copywriting simply visit his business One-on-One Professional Business Training. He also owns other businesses such as his online lingerie business Dreamy.com.au.

Author: Chris Le Roy
Article Source: EzineArticles.com
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I am wanting to know how to jump head first into the real estate market and get my feet wet while still making money. I do not have any experience what so ever, just a real urge to get into this market! I want to take classes but, I really don’t know what I need to take 1st and I want to start on my associates degree as a at-home work study but, I’m not sure what employers are looking for as far as education in the real estate world other than Business Admin. I hope there are some real estate guru’s on here to help a sista out! Thank you in advance!