It has been over 50 years since property prices and interest rates have been this low at the same time. After the zillion megaton explosion of the real estate bubble, costs have collapsed to all time lows and bargains abound. It doesn't take genius property mentors to see that now cash is king and if you've a few $ put aside you need take a look into investment property. You need to be exceedingly careful however and use all the tools at your command prior to making the jump. All you need to do is a drive 1 or 2 blocks in any urban area to see all the For Lease signs that are there, and many that've been there for a long, long time.
Because of the floundering economy, many firms have gone belly up and one of the biggest casualties of the entire recession (are you able to say depression?) has been and will continue to be commercial investment real estate landlords. They are the ones that are left holding the well-known bag when companies collapse and renters are forced to flee, many of them without having to pay any lease severance penalties.
When businesses can't afford to remain in a commercial space for need of income, the onus goes onto the landlord to be sure that there's a great dialogue with the renter. In the old days an owner would just throw out a defaulting tenant without too much thought and then raise the lease prices for the following inbound business. With today's epidemic of failing retail shops, service establishments, cafes, auto and body shops, and ever other sort of small to mid-sized firms, investment real-estate leasing space is asking for renters.
The landlords can avoid a hasty exit by failing enterprises by working with them to temporarily reduce or defer lease payments. This can give the corporation much-needed breathing room and release some money flow. The benefit to the owner is that he will at last see some rents from the firms when the economy picks up. One thing is sure and that is that the economy will improve ultimately. It might take longer this time to recover, but historically speaking, economies are cyclical and they always come back. When the economy and the failing companies do recover the landlord will have looked like an angel to the business, causing commitment, and it'll have made sound business sense.
For commercial real-estate owners who can't work out a plan for their tenants the results are grim. Take away that large payment each month and pretty soon you'll feel it in your pocketbook, even if your pockets are deep. Many have been forced to welch on their commercial loans and have studied their properties get grabbed by the banks.
If you're a speculator aiming to get into investment real estate then this is a great time. You can pick up an REO (bank owned) property for very little. Just be absolutely certain that you've a renter or 2 lined up before buying or you could be the next one facing a foreclosure of your own.
Because of the floundering economy, many firms have gone belly up and one of the biggest casualties of the entire recession (are you able to say depression?) has been and will continue to be commercial investment real estate landlords. They are the ones that are left holding the well-known bag when companies collapse and renters are forced to flee, many of them without having to pay any lease severance penalties.
When businesses can't afford to remain in a commercial space for need of income, the onus goes onto the landlord to be sure that there's a great dialogue with the renter. In the old days an owner would just throw out a defaulting tenant without too much thought and then raise the lease prices for the following inbound business. With today's epidemic of failing retail shops, service establishments, cafes, auto and body shops, and ever other sort of small to mid-sized firms, investment real-estate leasing space is asking for renters.
The landlords can avoid a hasty exit by failing enterprises by working with them to temporarily reduce or defer lease payments. This can give the corporation much-needed breathing room and release some money flow. The benefit to the owner is that he will at last see some rents from the firms when the economy picks up. One thing is sure and that is that the economy will improve ultimately. It might take longer this time to recover, but historically speaking, economies are cyclical and they always come back. When the economy and the failing companies do recover the landlord will have looked like an angel to the business, causing commitment, and it'll have made sound business sense.
For commercial real-estate owners who can't work out a plan for their tenants the results are grim. Take away that large payment each month and pretty soon you'll feel it in your pocketbook, even if your pockets are deep. Many have been forced to welch on their commercial loans and have studied their properties get grabbed by the banks.
If you're a speculator aiming to get into investment real estate then this is a great time. You can pick up an REO (bank owned) property for very little. Just be absolutely certain that you've a renter or 2 lined up before buying or you could be the next one facing a foreclosure of your own.
About the Author:
Rob Sherwood is an independent columnist that writes regularly about residential real estate investment so to learn more about property investment guidance that might help you purchase a moneymaking property portfolio visit Rob's site at Which Property Mentor??
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