When you have arrived at the big decision to probably sell your property in the next two to three years, it’s not time to sit back and mark time! After a decision like that, with all the considerations, it is tempting to take a deep breath and decide to consider “the details” when the time gets closer. Wrong!
Preparing for a successful, profitable sale is best served by first making sure your preparatory check list covers all the bases, is accurate and is doable in the two or three years you have in mind. Maximizing the return on your original investment requires excellent presentation to the field of relevant buyers.
Your region comes into play just on its own merit; the venue (if specific to your property use) must be attractive to its niche market; the condition and presentation of the property is a major influence; and, you will need expert guidance and advice in determining the value for establishing the right sell price.
That may already seem like a lot to confront. However, other categories for regard and action include making sure that your accounting path is clean as a whistle, and that all tax ramifications are current, accurate and comprehensive. It is smart to get the appropriate help from the appropriate professionals. Nothing can bog down sale potential quicker than numbers that are murky, tax and compliance matters that are out of order and, in general, any circumstances that seem to place a cloud over your property – real or imagined.
The “check list” may have more (or fewer) line items than mentioned here, but the point is simply that two to three years really do not constitute a long preparatory margin when you really look at the facts. Let’s consider some basic necessities that might fit the profile of your commercial property as it presently stands.
How might its condition adversely affect the establishment of value and sell price? How would refurbishment, repair or renovation improve those numbers? Is yours a tenanted property that has vacancies? Why? Examine the reasons, and try not to blame it all on “the economy!” General exterior grounds maintenance has relatively simple, straightforward remedies. Look at your vicinity, and if needed, try to influence your neighboring commercial properties to work with you to improve the surroundings for mutual advantage. (If your property lists and sells well, their property may re-stabilize and or improve as well.)
If your commercial property is a functioning business, re-evaluate staffing and procedures as one part of improving the bottom line over the projected two to three years. It is an important factor. Ask your realtor about a “1031 Exchange, <a 90 day roll-over process that presents some excellent benefits such as no capital gains.> Explore that and some other creative approaches with which you may be unfamiliar, with your realtor.
Taking a strategic approach to moving your property just makes good common sense. Each property is unique and presents its own challenges when you make that decision to sell. In fact, deciding to market the property at a measurable future date gives you the time it takes to do it right. It’s a bitter pill to just put it out there and hope for the best, then learn that there is a viable list of shoulda, coulda…
In my next column I will be looking at what’s hot and what’s not in commercial real estate! If you are buying, it’s smart to know who’s buying what; if you’re selling, knowing the trends helps guide your exit strategies.