Law Office of

HENRY B. LaTORRACA

Civil Trial Attorney

Commercial real estate buyers must consider many factors

| Feb 4, 2016 | Uncategorized |

Californians who want to buy commercially-zoned land or buildings have a lot to think about when it comes to determining whether their plans are advisable. Experts say that variances in appreciation rates from one type of investment to the next can determine the profitability of different asset categories, and real estate has unique costs that some other properties might not incur.

Expenses like maintenance can be hard to figure in advance, as some buildings may require ongoing or protracted work that doesn’t follow a predefined schedule. Cash inflows, such as rental income, may vary in accordance with comparable regional rental fees.

Although bonds and stocks on average appreciate at rates higher than inflation, real estate appreciation is often in line with inflation. Some real estate may appreciate faster if it is located in areas that are getting trendier. Advisers say that in order to calculate the actual profit associated with owning a building, it’s important to account for operating expenses and maintenance in addition to the actual purchase price and rent.

Companies and individuals who want to purchase commercial property may do so alone or with partners. In either case, the transactions they enter into are usually governed by complex legal agreements. When factors like real estate fraud, zoning, improper disclosures and other hurdles impact the profitability of such dealings, investors may find themselves embroiled in disputes. An attorney who is experienced in commercial real estate transactions can review proposed purchase and financing documents and point out to investor clients the problems that may occur.

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