The Easy Ways to Locate Commercial Properties For Sale in Delhi

There are some easy ways to locate commercial properties for sale in Delhi. The commercial significance of Delhi is increasing day by day and the real estate market in Delhi is becoming more vibrant nowadays. Owing to multiple reasons, the importance of Delhi is going up gradually. On of the primary reasons for this growing significance of Delhi is the factor of it being the national capital of India. But there are other reasons also. If we view in a wider perspective, we can find that New Delhi is emerging as one of the major international commercial centres. This is because of the global market trends in which Asia generally and India particularly is emerging as a main world market. Thus, being the national capital and geographically well-connected to neighboring industrial locations, the commercial significance of Delhi has grown much in recent years. Alongside, the property market in Delhi has grown far beyond those in other main centres in the locality. Hence, there are a number of reliable real estate agents, consultants and realtors who could be relied upon to locate the right commercial property of your choice in Delhi.

As I have already stated, there are some easy ways to locate commercial properties for sale in Delhi. One such way is to look for some bona fide real estate consultants in Delhi whom you can easily locate in Karol Bag, Laxmi Nagar, Daula Kaun, Munirka, South Extension, Punjabi Bag, Peera Garhi, Pahar Ganj, Jwendewalan, Ajmeri Gate, Lahori Gate, Okla, Nehru Place, Kalkaji, Noida, Greater Noida, Connaught Place, Defence Colony, or any other prominent location of the city. However, before approaching any dealer you need make sure that he is a registered dealer. Also, there are real estate portals like propertydalal.com and hotgurgaon.com where you can get latest information about Delhi properties and property consultants.

Another easy way to locate commercial properties for sale in Delhi [http://www.propertydalal.com/property-for-sale/c/india/delhi/new-delhi/%20] is to look up the local directories which constantly update information about property for sale and renting out. Also, the local dailies of the city regularly publish classified columns with categorized sections for particular kinds of commercial properties for sale in Delhi. You can sign up with some property portals of the region and post your requirements and under any circumstance you will get abundant data and information about Delhi properties in a matter of a few days. Here again, you should apply your prudence, practical experience and pragmatism to get the right people as the real estate industry is plagued with the problem of black sheep.

How to Quickly Determine the Value of Commercial Property for Sale

The value of a commercial property for sale is determined by using some simple formulas that are based upon the amount of net operating income that the property produces each year. So when you are looking at a commercial property for sale, one of the first things that you’ll want to ask the broker for is the profit and loss statement.

Some brokers who have listed a commercial property for sale may refer to this profit and loss statement as an IPOD, or income property operating data sheet. Once you get the IPOD, or profit and loss statement, you can then compare the information provided by the broker or seller to your other sources to help determine what the real numbers are. The challenge when looking at any commercial property for sale is that the broker and/or owner will often tend to exaggerate the amount of income that the commercial property for sale produces while also trying to minimize the amount of operating expenses that are reported.

How to Determine the Value of a Property for Sale

The reason for this is simple. The value of any commercial real estate is based on the amount of net operating income the property creates each year. In fact, each additional dollar of annual income increases the value of the property by roughly ten dollars, depending on where the property is located, and how old it is. Note that this extra net income can come from either getting additional revenue in rents, or from reducing expenses by managing the property more efficiently.

Once you understand that owners of commercial real estate will tend to present unrealistic numbers in an attempt to get a higher price for their property you’ll understand better why it’s necessary when looking at any commercial property for sale to get to know the market you are investing in. When you know what the rental rates in an area tend to be or what the typical expense ratios are for a twenty-five year old apartment building then it’s much harder for the broker or owner of a commercial property for sale to attempt to pull the wool over your eyes.

Verifying the Income and Expenses

The first step in verifying the income of a commercial property for sale is to ask for the rent roll. The rent roll is a list of what each apartment, self storage unit, mobile home lot, or office space rents for. Make sure that you get the actual rent roll because the owner or broker of a commercial property for sale may try to give you a Pro-forma rent roll instead of the actual rent roll. Pro-forma means that there is an expectation, realistic or not, of getting higher rents than the property is currently getting. My response to this has always been, “If you raise the rents up to match the pro-forma, then we’ll use the higher income amounts, otherwise we’re going to base our valuation on what the property is currently producing in income.

When looking at the expenses from a commercial property for sale, remember that you’re trying to come up with the actual amount that it will cost you to operate the property rather than what the seller’s expenses have been. So while it’s helpful to know exactly what the seller’s costs have been, I’ve learned NOT to rely on the information provided by the seller when looking at a commercial property for sale because this information is almost always inaccurate.

A Simple Formula to Use for Expenses

The expenses will vary depending on the type and age of the commercial property for sale. For example, if you are looking at buying a Class C apartment building which is at least twenty-five years old, then the expenses will run between 45 to 50 percent of the collected income each month. The collected income, known as the Effective Gross Income, is what’s left after the cost of vacancies are subtracted from the total amount of rents on the rent roll from the commercial property for sale.

The final step in determining the value of a commercial property for sale is to divide the net operating income by the capitalization rate, which varies from about 6 to 12 percent depending on the type of property, the age, and the location of the commercial property for sale. The fastest way to get an idea of what capitalization rate you should be using when looking at a commercial property for sale is to ask another broker who is not involved in the transaction.

Using Escape Clauses to Limit Your Risk

Another way of protecting yourself when looking at any property for sale is to make sure that your purchase contract allows you a period of time to get out of the deal if you are not comfortable with anything that you find. Done properly, you can often tie up a property for 60 to 90 days so that you have time to accurately determine the real value. This makes it easier to look at commercial real estate, because you can get out if you have the right escape clauses.

Real Estate Agents – Good Reasons Not to Put a Price on a Commercial Property for Sale

When it comes to selling a commercial property, it is not always the best strategy to put a price on the property and advertise it as such. Advertising a property at a price is a strategy that should be regarded as a last resort.

If the property has exhausted all other methods of sale then the pricing process may be acceptable. Up until then, there are some other very good methods of sale that can be explored subject to the conditions of the market and the type of property to be taken to sale.

Here are some very clear reasons why you should not put a price on a property:

  1. It shows the local market the ultimate price that the property owner requires. Regrettably many property owners stack up the price so they can negotiate downwards. This stifles the enquiry from genuine purchasers. The process can also kill the listing marketing campaign.
  2. Pricing a property and advertising that way is a process of hoping and waiting for the right purchaser to come along. Selling a property at a price is usually a long and drawn out process.
  3. In some respects, a property that is promoted a price is regarded by purchasers as generic and nothing particularly special. The property ranks amongst other ordinary properties in the local area. There is no urgency to the sale process.
  4. The property market is changing so fast that price determination is quite difficult for some properties and locations. The price can in many situations be a calculated guess.

When a property comes on the market for sale, it is the period of the first 4 to 6 weeks which are most important. During that time enquiry will be generated and inspections will occur providing the property is correctly promoted.

The qualified buyers that inspect the property will put their own price on the property based on local market intelligence. These buyers know what prices are doing and are usually far more realistic than the sellers of the property.

The critical issue in selling commercial real estate is to get fair and reasonable offers from the inspecting qualified buyers. If the method of sale you choose is supported by time factors and closing dates, it is quite likely that you’ll get offers that you can seriously consider.

The best time based methods of sale to use with commercial investment property are auction, tender, and expressions of interest. They all suit the marketing of commercial, industrial, and retail property. A local real estate agent will understand the best methods of sale to use given the prevailing property market conditions.

Even in today’s property market with its economic challenges and difficulties, the best initial methods of sale for commercial real estate still remain as auction, tender, and expressions of interest. If the property still is unsold after one of these methods has been correctly used, then the owner can resort to the standard price and hope approach.

The sale of a commercial or retail property is a complex process requiring knowledge and strategy. This is where the real estate agent that understands the local market can add significant momentum and focus to the sale process.