Factors That Affect the Value of a Commercial Real Estate Property

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Presentation Description

Investing in the commercial real estate sector is considered lucrative due to the handsome returns on investment. However, investing in the commercial real estate sector is also fraught with many risks and the most significant risk to your investment is the fluctuating costs of the commercial properties. There are certain factors in the commercial real estate sector that affects the value of the commercial properties. Go through the slide to know the factors that affect the value of a commercial real estate property.

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Presentation Transcript

Factors That Affect the Value of a Commercial Real Estate Property:

Factors That Affect the Value of a Commercial Real Estate Property

Slide2:

The reality about the commercial real estate sector is that it is always fluctuating and this requires a complete understanding of the real estate sector to avoid the pitfalls.

Slide3:

Investing in the commercial real estates is considered lucrative due to the constant cash flows, however, there are certain factors that play a major role in deciding the value of a property.

Slide4:

This concept is equally applicable for those looking to purchase or invest in the commercial real estate as it is for those looking to sell or lease their properties.

Slide5:

Here are the factors that affect the value of a commercial real estate property. 1 Location 2 Demographics 3 Physical condition

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Location 01

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It has been repeated time and again by most of the experts that the location is everything and it also applies to the commercial real estate properties.

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Moreover, one of the little-known facts is that different locations will pose greater desirability within the market at different times.

Slide9:

The most important thing for you as an investor, you should consider the location accessibility in your target market for your clients before going forward with your investments.

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Demographics 02

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Demographics is intertwined with the location of a commercial property and plays an equally important role in deciding the value of a commercial property.

Slide12:

Demographics of a place include factors like age, race, gender, average income level and the projected growth of an area and its population.

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You have to take into account the above-mentioned factors as it will help you to find out the types of properties that are in demand and what will be their prices.

Slide14:

Physical condition 03

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The physical condition of a commercial real estate property is one of the key factors that plays a huge role in its sale or lease price.

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The properties that are newer built will attract more people within the market because they will incur less potential cost in the form of repairs and upgrades.

Slide17:

Consequently, most of the time older properties require repairs, some of which can be extremely costly and this plays a spoilsport for investors.

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Conclusion

Slide19:

The above-mentioned points are some of the factors that play a role in determining the value of a commercial real estate.

Slide20:

As investing in the commercial real estate sector is fraught with many risks, you have to consider everything associated with a property before investing in it.

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