Office Buildings For Sale Is A Good Investment Opportunity
Many investors like to invest their money in real estate. Sometimes many prefer office buildings for sale as there is a perennial demand for such buildings. Constructing office buildings for sale is also more profitable than residential properties. Leasing office buildings, in fact, can become a good and sufficient retirement plan for many as many start getting a regular cash flow right from the beginning. However, apart from the various benefits and advantages of the office buildings for sale there are also some risks to bed aware of when investing in these office buildings for sale.
The most common is the rapid fluctuation in rental rates of office buildings. During times of recession, there may be a drop in the amount of business and that can hit the rental rates of office buildings really hard. For instance, after the dot-com crash, the rent of several buildings in and around the Silicon Valley came down by a steep 30%.
Many owners/investors plan to lease properties for long periods in order to avoid of such a drop. But even that cannot help as the business operating from the premise can simply refuse to pay the rent. Having negative flow of cash is also a difficult problem to overcome. But the worst thing is that during the rough period many buildings remain vacant for few years without any income coming from any side. However, the good thing is that long term leases help in reducing the risk. In fact long term lease are one of the
By knowing this fact many would be thinking not to invest in the office buildings. But this is not to be the case because in case of good performance of the economy while having a low
vacant-rate in the area would generate regular cash flow from the office space. One thing should also be done by the owner/investor to avoid unpredictability regarding vacancy rates and rent levels. That is to have a certain amount set aside to tide over rough times.
If the investor is buying an empty building then he must advertise prior to the closing of the deal. Also it is advisable to have a talk with the other buildings owners to know about their various problems. Last but not the least proper research should be done prior to investing in office buildings.