Tampa has become one of the sunshine state’s most valuable cities. It sheer commercial importance simply cannot be denied. This is something that all entrepreneurs should take note of. If you are among the smart ones, then you should probably use it to your advantage and consider investing in key Tampa locations.
Of course, the last thing we want to do is to give you the false impression that real estate acquisition is an overly simple affair. The truth of the matter is that it is a complex process that will require your full attention. That being said, our main goal is to make things easier for our readers.
Know the Lingo
As any entrepreneur would tell you, every industry has its own language. The real estate industry is certainly no different as it has its own vocabulary. It makes full use acronyms most people not working in the commercial real estate will surely find strange and unfamiliar. That being said, you should make it a priority to familiarize yourself with these terms. At least, if you want to make things easier for yourself.
Listed below are a couple of commonly used real estate terms worth your time.
- Capitalization Rate – Commonly known as Cap Rate, it pertains to the property income divided by its total value. This will surely come in handy if you are looking at the prospective returns on your investment.
- Loan-To-Value – LTV refers to the ratio between the money you are asking from the bank or lender and the total value of the property you are looking to purchase. This is vital if you are looking into the different financing options available to you. It will also give you a concrete idea with regards to the value you need to have upfront.
- Cash on Cash – This compares the property’s annual income and the amount of money you have actually put into it. This will help you make a projected trajectory and timeframe with regards to when a specific property will actually become profitable.
Do Your Homework
It should go without saying that not all properties are the same. Some will inevitably fit your needs much better than others. That is why you should make it your priority to really look into the fine print. If possible, you should go to the sites and assess the properties yourself. Keep in mind that there are a number of different factors that you need to take into consideration before actually making a purchase or a lease.
- Price – Like with any other business venture, your budget should always be figured into your plans. Look at the capital you have on hand and the possible sources of funding available to you.
- Location – The location of a particular business can determine whether it will succeed or not. That is why, when it comes to real estate, you are not only paying for square footage, you are also paying for its location.
Real estate deals are rather complex affairs. Beautiful as Tampa may be, its real estate market is certainly not exempted from this rule. With that in mind, we have come up with a few simple tips that you should always remember.