If your commercial property investment is starting to show signs that it’s maximised it’s potential or you are simply looking to move your portfolio in a different direction, then now would be the time to investigate just how to get the best possible sale price for your commercial property. In a market which is becoming more competitive year upon year, this can indeed prove challenging, and in this article, we’ll take a look at just a few simple ideas to help you get ahead and truly maximise the return on your commercial property investment.
Get as Many as Viewings as Possible
A great tip to help maximise the price you can sell your property for, is to get as many viewings as possible. Make sure you have brought in as many potential buyers as possible before you accept a final offer. In fact, book as many viewings as possible before you accept any offer at all.
This may seem counter-intuitive; after all, if one of the early viewing parties shows an interest, why would you not want to attempt to close the sale as quickly as possible? To be clear, what we’re suggesting here is to get as many viewings as close together as possible. If you know that a viewing typically takes one hour, then book hour-long appointment slots throughout the day, allowing for some breaks, and you could entertain as many as 8 interested parties in a single day.
But how is this going to help?
Well, the more viewings you can attain, the more the property appears desirable to any interested party. This strengthens your position at the negotiating table, as you can afford to reject low offers at the earliest stages of marketing, comfortable in the knowledge that, statistically, as you’ve got so many viewings, the chances of your receiving another offer are incredibly high.
Ideally, it would be more than one offer, sending your property into a bidding war. All of this added desirability is going to have a very positive effect on their offers, driving the final sale value to a much higher return.
Set the Right Price in the Right Location
Are you selling your property at the right price in accordance with the location of your property? Different locations will have a different set of prices for their properties, as certain locations are more in demand for commercial properties than others. Bristol, Oxford and Edinburgh are currently the three most popular places to start up a business.
It’s important to research this thoroughly, as setting a price that’s too high will send your buyers into looking at competing properties within the same location. Naturally, if there are two similar properties within a mile of each other, then issues of location are removed from the equation. Buyers may well view both properties, but when forced to question why they should pay more, they’ll be viewing your commercial property in a negative light.
Conversely, setting the price too low can have equally negative effects. Potential buyers may well assume that there are issues with the property that they’re simply not interested in taking on board. There may be some renovation required, for example, but they were looking at investing in a property which would be ready for business operations a lot sooner.
Of course, sensible investors are more likely to look at your property and see for themselves, but you’ll remember that we are trying to maximise the number of people who come to look at the property. Many commercial investment companies will send in their buyers with a simple checklist. They may only have time to view a small selection of properties and, as such, will want to make the very best use of that time, so anything which raises eyebrows may quickly take itself out of the race.
It goes without saying that, some locations are more popular than others when discussing commercial property. There are numerous factors to consider when the subject of location first comes up. The size of the local population is a key metric to any potential buyers. The town will be where their staff, customers or both live, hence a large and growing population is key.
Living Standards also need to be taken into consideration. One would not expect to see a three Michelin Star restaurant in a high street populated by fast-food restaurants and shops that sell everything for one pound! It’s important that commercial property investors truly understand their local demographics, as it’s a lack of that same understanding that has lead to a lot of high street stores to go out of business, and a tenant that has closed down is unlikely to be in a position to pay their rent, thus immediately lowering the return on your investment as you maintain mortgage payments on the property.
Put yourself in your buyer’s shoes
Commercial property investors are rarely as interested in the bricks and mortar as they are the pounds and pence (well, let’s be honest – just pounds!) If you can show a commercial property unit with tenants lined and rent projections for the next ten years, then you are not just selling a commercial property – you’re selling a tangible financial asset.
Providing solid research into the state of the market in your area can prove to be of tremendous benefit to potential purchasers, some of whom may well be looking at investing in commercial property for the first time. Those purchasers, in particular, will be much more comfortable dealing with a seller who understands their concerns, and better yet, has access to the means to address those concerns.
All investors ultimately work by the same mathematical formula – If I invest X, how long before it turns into Y? Commercial property investment groups will have added a lot more to this formula, but it does all boil down to the same thing, and for the first time buyer, there’s another question that comes with it – What do I have to do to make sure X turns into Y?
This really could prove to be an excellent opportunity for you. As a commercial property owner you will have built up a network of contacts which help you manage the building. You could realistically offer to introduce those contacts to new owners who will want to express their gratitude by making the best possible offer on your commercial property.
One crucial expense that all businesses need to consider when moving to a new location is that of business rates. Business rates are a Government imposed tax on any property that is used for business purposes. They’re calculated based on the ‘rateable value’ of a property and it’s important that, as the owner, you are fully aware of the rates on your property and have all of that information to hand to share with potential buyers.
It’s just one other way by which preparation helps you to present your commercial property in the most positive way.
Update The Property or Lower the Price?
There are certainly plenty of commercial property investors that are highly skilled in the art of taking a near dilapidated building and restoring it to a modern masterpiece in commercial building design. If your building fits that description, then you have a decision to make – do you update the building in hopes of attracting more buyers at a higher price or do you market at a lower price to attract those investors which would be happy to update the property themselves?
But there are some buildings which one would not exactly call dilapidated but who wouldn’t call ‘well maintained’ either. If the repairs required are more cosmetic, or if the building does not quite meet the required health and safety standards, it would probably be best to carry out those repairs before bringing your commercial property to market.
Many commercial property buyers will still want to look at a blank canvass, but knowing that the electrics are tested and that the heating and hot water work properly could prove to be a weight off of their minds.
A Great Network
It’s always good to have a great team around you to help you achieve great success in regards to getting the most out of your property sale. It can be highly beneficial to use property consultants to help you understand the ins and outs of your property. We at Prideview Group are veteran experts with over thirty years of experience in the commercial property industry; we can assist you with auctioning, marketing and pricing for your property, making sure you won’t fall short of a good sale.
There are many ways you can improve the deal you get on your property sale, to find out more contact our team of property specialists at Prideview to help you get the best sale for your property? We have a network of over 100,000 property investors, so you can have complete peace of mind with regards to finding a good, reliable investor that will give you a great offer.