Tips for Buying Commercial Real Estate
A commercial real estate purchase is a complicated undertaking that is challenging even for professionals to time right to get maximum investment value.
Also, it a project that is overflowing with risk, with agents, buyers and sellers, and renters alike having to bear the brunt of sudden increases or decreases in demand. But of course, we all know that the potential rewards can be considerable.
Reasons For a Business to Buy Real Estate
According to experts, buying commercial real estate offers more control over the the real estate part of overhead costs, in contrast to leasing, where you may end up with higher rental costs as the lease rolls over at a time when the market is tight. Yet another advantage is investment benefits, which includes the depreciation of the property for purposes of taxation and, in the longer term, asset appreciation.
There are various factors to look into for anyone planning to buy a certain commercial real estate property. First of all, the traditional concept of “location, location, location” is perfectly applicable for business properties as it is for residential. Here are other essential considerations to be made:
Where the property is located is still the main issue. You have to be within close proximity to your suppliers, employees, and most importantly, your customers. You must be convenient to everyone involved in your business, if you want to keep them there. However, depending on the type of business you have, rail, highway and shipping lane access may prove important as well.
After determining a general location, check the property’s history in terms of wear and tear, environmental issues or possible liability issues (for example, the use of lead paint in older properties).
Fitting the Purpose
If you are a financial services company, you clearly need commercial office space. As a manufacturer, you have to look for industrial space. Anyhow, make it a point to research about and learn zoning matters, ensuring that these will not get in the way of what you’re planning to do on the property.
Exterior and Interior Limitations
Now Zoning laws, building codes or covenants may restrict certain changes or adjustments that you might be planning to make on the property. For example, if you buy a building in a historic area, there may be rules to follow when making changes to the facade.
Parking and Access
Make sure parking will be convenient for your customers, and access is compliant with laws like the Americans With Disabilities Act.
Expansion or Leasing Opportunity
Lastly, entrepreneurs are generally optimistic about growth, and this the possibility of an expansion will be considered, along with the flip side. When buying business property, know whether or not you will be able to lease out unused space, in the event that you fall short of your growth forecasts.
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