Getting the Edge in Naples Commercial Real Estate
If you have vacant Naples commercial real estate, how do you determine the future rental value of it? With the market on its head, the traditional valuation methods don’t always work. I’m going to give you 8 good ways of valuing commercial real estate ready for the next tenant. In Naples, commercial real estate once fetched a premium. It doesn’t right now, but it will do again and landlords need to remain competitive now, while having half an eye on the future.

1. Play at being a tenant for a day. View the market as they would and go shopping for property. Gauging what you can get for your money is a good way of valuing your own property competitively. There is enough data out there in realtors windows and on the internet to be able to gain at least a ballpark figure of what your property is worth. 2. Ask your tenant before he leaves. If they are relocating, they will have an idea of what’s going on in the market. If you’re on good terms with them, ask them. If they are upsizing or downsizing they should still have a per square foot amount to offer. 3. Talk to a property manager who has lots in your area. Find out what they are charging then undercut by 2-5%. They often sit at the top of the rental price range. Undercutting them will make you more popular with tenants, but not with the manager. 4. Increase the last years rent by 3-5%. On average that is what Naples commercial real estate has been appreciating over the past couple of years. 5. Check Craigslist for other rental property. Check for vacant lots, and people wanting to rent and see what prices are like. You would be surprised at how much business goes on there. 6. Talk to real estate agents at functions. Dinners like Chamber of Commerce or something. Schmooze them and get an idea of what the market can tolerate. They are often much more free with information in a social setting as long as you don’t make the questions too obvious. 7. Trial and error. Raise the existing rent by a percentage then wait a while. If the phone doesn’t ring lower it a bit. As soon as you start getting interest you know the amount is right. 8. Consider rental terms instead of return. Having tenants for longer paying slightly less is better than having a high turnaround paying a premium.

Doing this research before your current tenant vacates is a good way of minimizing down time between rentals. Spending a little time keeping up to date with local market conditions enables you to turn properties around much quicker.

You also need to consider advertising, maintenance and any other issues between tenants. Often you can begin exterior work while the tenant is still there, which minimizes downtime even further. Even if it’s a simple tidy up and paint job, if it increases curb appeal it will increase your chances of renting it.