When you’re setting the price for your retail property, there are a lot of conflicting factors that could adversely influence your decision. So, how do you price a retail building to sell? Keep reading to learn some key strategies.
Unfortunately, the stakes are higher than you may think. If you set an emotional price on your property—or ask for something unrealistically high—you could be dooming your sales process to failure.
Knowing exactly how to price your retail building is an art. You’ll need to know the surrounding market like the back of your hand. In addition, you will need to have profit/loss statements to support your asking price. Depending on how much you’re asking, you’ll need to invest in key marketing efforts.
Here’s what you need to know about how to price your property.
What Goes Into a Purchase Price?
The commercial value of investment real estate is often dependent upon uncontrollable values. These include things such as rent, maintenance costs, and current market conditions. You’ll need to complete a lot of research or work with a local expert to ensure that you have all of the information you need.
There are also several different approaches you can take to figure out the sweet spot between what a buyer is likely willing to pay and the amount you need for a good profit. Consider which of these property pricing methods would work best for you and your goals:
1. The property cost approach. If you’re pricing with this valuation strategy, you’ll consider how much it would cost to rebuild your structure from its foundation. That estimated cost would become your starting sales price. This strategy may be a good idea if you don’t have a lot of information about comparable properties in your area.
2. The capitalized-income approach. If you’re able to obtain the relevant information and do the math to determine how much yearly income an investor could expect from your property, you may be able to work that into the sales price. For example, if the expected yield for your building is projected to grow over the coming years and you can demonstrate that persuasively, you may be able to set a slightly higher price.
3. The market approach. If you can identify comparable properties and obtain their recent sales data, this approach is simple. Use the most recent purchase price and add in any inflation necessary. Then, use that to determine the current fair market price of your space.
Ways to Optimize The Sales Process to Achieve the Highest Possible Purchase Price
You can technically set any purchase price you want. If the price is too high for the market, you may need to wait for quite a while to achieve that price. You might have to negotiate quite a bit in order to sell it in a timely manner.
Here are just a few strategies to implement in order to maximize your profit potential:
- Make your property look as good as possible. First impressions and curb appeal go further than you think. It’s worth it to make even some free or cheap improvements, such as clean floors or a coat of fresh paint.
- Market widely. Make sure as many eyes as possible are on your property. Take good pictures of your space, and post them with good copy and stats on the mosst reputable internet CRE listing services for interested buyers or agents to peruse.
- Work with an expert commercial real estate professional.An Atlanta-area commercial real estate agent will know exactly what properties are selling well, how to market your place strategically, and how to negotiate in your favor. Hiring an experienced agent is one of the best things you can do to make your investment as worth it as possible.
Atlanta Commercial Real Estate Experts Ready to Help You Price Your Property
At McBride & Ceballos Commercial Real Estate, we get it. Figuring out how to price a property so you can make a profit is hard.
We’re here to put our experience and expertise to work for you. We’ll help you develop your pricing strategy and then assist you through to the final sale. Contact us today to learn more about how to sell your retail property for top dollar in the shortest amount of time.