Author: Zhi Xiang Tan

Should You Invest In Commercial Real Estate?

Residential property includes structures reserved for human habitation rather than commercial or industrial use. As the name implies, residential property can be used for commercial purposes, but apartment buildings that serve tenants as “apartments” are classified by the landlord as commercial activities. 

Note that planning and licensing boards break down industrial properties (properties used for manufacturing and production of goods and heavy commodities) and consider most of them a subset of commercial properties. In the typical case, the property is leased. An investor or group of investors owns the building and collects rent from the business operating there. 

In commercial real estate, lease terms usually vary depending on the type and quality of the property. For example, a purpose-built, state-of-the-art industrial manufacturing facility may enter into a triple-net lease with an initial term of up to 25 years. For logistics properties, the lease term can range from 3 to 10 years, depending on the location, property type and tenant. 

We are investing in real estate funds focused on commercial properties. We are acquiring commercial real estate as a real estate investor: acquiring commercial real estate by selling or leasing it to an operator. Participation in syndicated commercial real estate deals through crowdfunding platforms. We are acquiring undeveloped land for industrial development. 

When buying commercial real estate, think of buying traditional real estate on a larger scale. Buying commercial real estate opens up the possibility of tripling net rent. The rental business has risks that are not available to investors in residential real estate. When buying residential real estate, you don’t have to deal with emotional and personal attachment factors.

The income potential is what attracts many real estate investors to commercial real estate. Commercial real estate is known to have a higher rate of return than residential real estate. Acquiring commercial real estate can be a wise investment if you know what to expect. The profitability of buying commercial real estate can lead to solid professional relationships, flexible leases, and limited business hours. 

Commercial real estate is a high-risk, high-return real estate investment. Investors are likely to be high net worth individuals, and CRE investments require a significant amount of capital. The strength of the local economy can affect the value of a CRE purchase. Ideal properties are located in areas with low CRE supply and high demand due to low rental rates. 

Commercial real estate is a type of commercial property that can be bought and sold for business purposes. As a rough definition of commercial real estate, it is a place that is used as a warehouse, investment property, factory, logistics or administrative area. Unlike retail or office property, it is a commercial property that is used for industrial purposes. There are tremendous opportunities, versatility, and increased demand, and these are the reasons that make purchasing this type of property easier than residential property. Commercial real estate can be part of a bigger picture. 

The best thing about commercial real estate is that it is not limited to a single purpose. Commercial buildings are not just offices but also manufacturing and logistics buildings. You can rent them out in threes or just to one company and use multiple tenants. 

Owners need to invest much capital to make the property available to other tenants. Oversupply Risk: Given the expected future demand for warehouse space, real estate investors build too many properties as speculation. They are producing too many in a slow market, which affects occupancy and rental rates, which depresses property values. 

Residential tenants are more likely to make repairs to their property in a breakdown or accident. However, this is not the case with commercial property tenants. Occupants of commercial buildings have a strong sense of responsibility for the property. 

When setting lease terms, it is vital to consider the average rent in a commercial property submarket. If the current rent tenants are receiving higher than the prevailing market rate, your property may perform poorly and require active management to bring it back up to the market. Suppose your property is more expensive than the market rate. In that case, it may take longer to find tenants, resulting in significant rent losses and potential vacancies, and you run the risk of not getting a favourable result if you want to sell the property in the future. If you decided to invest in residential real estate properties instead, it is wise to consider investing in new condos. For a list of new launch properties, please visit https://www.newlaunchportal.com.sg

Depending on the nature of commercial property you are looking to purchase, it is crucial to understand the different building classifications and what they mean to you as an investor. Class C properties bring cheaper rents than Class A and B properties. Other types of commercial property such as industrial buildings, hotels, and retail.

7 Things Your Real Estate Agent Wants You To Know (But Will Never Tell You)

Whether you are a buyer or a seller, home sales can pretty much feel like a one-sided process as it is quite difficult for you to get feedbacks on what could be going wrong from the other side. Therefore, we are going to reveal to you some real estate truths as well as actual real estate agent secrets for you to have a better understanding of how the real estate industry is like. 

Agent’s Commission Is Negotiable


The common belief is that the property commission received from closing a deal will always be 6%, which will be further split between the seller’s agent and the buyers’ agent. Although this is always the case for most of the deals, having a fixed commission across the board would actually be violating the antitrust laws for real estate commissions. Each broker should independently set a price and the seller can always negotiate this price before he finally makes the decision to sign the listing agreement. As for buyers, they should not worry about this as they wouldn’t be paying their real estate agent. Sellers are the one paying the agent commissions which will be a certain amount of the profit earned from the sales. Therefore, home buyers shouldn’t be worried of hiring an agent to help them through the process since they wouldn’t be forking out a single cent for their service. 

Your House Smells Bad


For homes that have pets in them, most agents would mind letting you know when the animal scent is detectable so that you will be able to do something about it before letting a potential buyer have a look at it. But for those whose house has a distinctive mouldy smell, it can be quite difficult for the agent to bring up this topic since things can get pretty awkward, for all we know. Therefore, it is always a good practice to throw out moldy food and to wipe away any spills or stains immediately. Also, when you are throwing out your garbage with all those rotten foods inside, apart from changing the bag before the buyers come over to view your place, consider placing a sachet or tea bag at the bottom of the garbage can. This will help you to get rid of the odor caused by the rotten garbage. 

Your House Is Messy


It is important to keep your place neat and tidy before a buyer comes over because most buyers are sure to be put off by the clutter and mess in your home. This also means that there is a high chance that they wouldn’t want to buy over your home. What many people don’t know is that, rather than informing their client that their home is messy and they should do something about it, most agents will actually clean a home for sale themselves without their client knowing.

Jean Quek, an agent, “It is up to the agent to tidy up before showings – hiding musty towels, diaper pails, litter boxes, dirty dishes and even used underwear and socks.” Many agents feel that this is a sensitive issue to touch on therefore they did much rather do the cleaning up by themselves than to inform their client on the mess. 

The Agent Has Little Control


In order to get your listing, an agent will definitely promise you that you will be able sell out your home fast if you engage in their services. Yes, it could indeed be true but then again, they can’t really predict what is going to happen in the future. They can’t exactly control how fast or how slow your house will sell. Sean Tao says, “While it is true that an agent has to get certain basics correct in order to sell a home, once they do those things, the result is largely out of their hands.” As a seller, before you hire any agent, you can ask him or her how long it is going to take their listings on average to sell. Use this information to compare it with the other agents, and you will eventually know which one you should go for. 

People Are Petty Over Refrigerators


A good negotiation will leave both side feeling as if they have won and lost something at the same time. However, there is always one party which will wish to ‘win’ the other. And this is always determined through the ‘battle’ for the refrigerator. This is because refrigerators apparently fall under the grey area regarding whether it should be included into the sale or it is going to be taken away by the seller. Make sure that your purchase contract specifically notes down whether the refrigerator is going to be included with the sales or excluded. Even if you verbally change the terms of the contract, you will need to make sure that the changes are noted down. Susan Bae,a real estate agent recounted her experience, “One time, I was the listing agent of an amazing architectural home that had a really old side-by-side refrigerator that looked out of place.” The buyers said they would replace it with their own so the seller took the fridge along with them. However, the contract stated that the fridge would be included in the sales, and Leikin didn’t get the change in writing. “The buyer’s agent started screaming at me upon finding the fridge was gone. So the buyer’s side demanded a $2500 holdback. The seller returned the refrigerator instead.” Therefore, to avoid such an incident from happening, make sure every changes in written down clearly in black and white. 

Never Ask Your Real Estate Agent About Race or Ethnicity


It is unethical for your real estate agent to refuse to serve you due to the prejudice against race, color, national origin, religion, sex, disability and the presence of children. Therefore, it is a good idea not to ask your agent anything that is related to these. Ernest Liew, a real estate agent says, “I can’t tell you legally who lives where or who is buying your house. Even if I could, I would not.” But for those who are sincerely looking for information on a neighborhood because you are new to the area and would like to know more of the area so that you can make a better decision, there are ways which you can do so on your own. For example, you can head over to the local cafes, stores and markets in the area to have a feel of the place yourself Then you can probably go online to do some research on the neighborhoods’ history of crime rates, school districts, local amenities and so on and so forth. 

You Can’t Afford This House


You need to keep in mind that a real estate agent can help you purchase a house but the deal can’t go through if you aren’t financially prepared. It is not a real estate agent’s responsibility to set the limit of your budget. Maintain your credit, save for closing costs, and look at what you can truly afford.

What is Real Estate in Singapore ?

Real estate is the land, the soil, the buildings, the air rights above the ground, and the subterranean rights below the ground. The term “Real Estate” means real or physical property. “Real” comes from the Latin root res, meaning things. Others say it comes from the Latin word rex, meaning “royal,” since kings used to own all the land in their kingdoms. Singapore’s residential property consist of HDB from the government, condos and landed.

Four Types of Real Property

There are four types of real property:

Residential real estate includes both new construction and resale homes. The most common category is single-family homes. There are also condominiums, apartment communities, townhomes, duplexes, triplexes, quadruplexes, high-end homes, multi-generational homes, and vacation homes.

Commercial properties include shopping centers and strip malls, medical and educational facilities, hotels and offices. Multifamily properties are often considered commercial, even if they are used for residential purposes. This is because they are used to generate income.

Industrial properties include manufacturing buildings and land, as well as warehouses. The buildings can be used for research, production, storage and distribution of goods. Some buildings that distribute goods are considered commercial real estate. Classification is important because zoning, construction, and sales are handled differently.

Land includes undeveloped land, working farms, and ranches. Subcategories within undeveloped land include undeveloped land, early development or reuse, subdivision, and site assembly.2 Learn more here Land Broker Transactions.

How the Real Estate Industry works

The term “real estate” also refers to the production, purchase, and sale of land. Real estate affects the U.S. economy because it is a critical driver of economic growth.

The construction of new buildings is a component of gross domestic product. It includes residential, commercial, and industrial buildings. In 2018, real estate construction contributed $1.15 trillion to the nation’s economic output. That’s 6.2% of the U.S. gross domestic product. That’s up from $1.13 trillion in 2017, but still down from the 2006 peak of $1.19 trillion. Back then, housing accounted for a whopping 8.9% of GDP.

New home construction is a critical category. It includes construction of single-family homes, townhomes and condominiums. The National Association of Home Builders provides monthly data on home sales and average prices. New home sales data is a leading economic indicator.3 It takes four months to establish a trend for new homes sold.4

In Singapore, URA controls the private residential, HDB controls the public housing and JTC controls the industrial.

Real estate agents help homeowners, businesses, and investors buy and sell all four types of properties. The industry is typically divided into specialists who focus on one of the types.

Seller’s agents help find buyers, either through the Multiple Listing Service or through their professional contacts. They set the price for your property by using comparison listings of recently sold properties, known as comps. They can help you spruce up your property so that it looks its best to buyers. They will assist you in negotiating with the buyer and help you get the highest price possible. You can find more sales agent services here.

Buyer’s agents provide similar services to home buyers. They know the local market. This means they can find a property that meets your most important criteria. They also compare prices, which is called “comparison shopping.” This allows them to guide you to areas that are affordable. Buyer’s agents negotiate for you and show reasons why the seller should accept a lower price. They help with the legal aspects of the process, including title searches, inspections and financing.

Real estate agents must first take the exams called Real estate salesperson exam. They will then be able to help buyers and sellers transact their properties