Despite fluctuating trends in recent years, commercial real estate remains lucrative to investors. People who invest in commercial real estate, such as housing, offices, retail, and industrial properties, often are interested in stable income through leasing and renting, or via profit margins following sale. If you are interested in investing and want to know more on how commercial real estate works, working with a broker may help. The role of commercial real estate brokers is often ignored, and many investors, especially new people, believe that they can manage their profile without external help. This, of course, may not be the right decision.
“Do I really need a commercial real estate broker?”
Real estate agents and brokers do more than just connecting buyers and sellers, especially in commercial real estate. They often have the experience of handling deals that are otherwise complicated, and they have market information that’s hard to derive from online search. From ensuring that you find right tenants for your property and handling the screenings and other tasks, to sorting properties that are worth investing now, your broker or agent will do it all. Brokers are also responsible for interacting and negotiating with other parties to come up with lease and sale agreements that are beneficial and profitable to their investor clients.
The costs and beyond
For all the work they do, commercial real estate agents do make a commission, and in case of leasing, this is a percentage of the rent, which will be collected during the term of the lease. In case of commercial real estate, lease agreements are typically longer, often extending to 10 years. This brings us to the question – Should you afford a broker? Ideally, it would be nice to work on your own, but most regular investors rely extensively on commercial real estate agents, for various reasons, such as –
- They don’t have the time
- They don’t know much about markets
- They want to play safe
- They wish to focus on other avenues
- They don’t want to be directly involved in commercial real estate dealings
There are risks in commercial real estate work that can be mitigated by working with a professional agent. Think of brokers and agents as your extended arm in business. They will do what it takes to make a gain for you, and in return, they ask a commission, which is fair, just and in sync with market trends.