Tips for Buying Commercial Real Estate
Purchasing commercial real estate is a convoluted venture that is tough even for the pros to time right to increase their investment value.
As well, it’s a project replete with risk, as everyone involved in the picture – from buyers to sellers to agents to renters – can suffer the negative consequences of a drop or surge in demand. Then again, we also understand that the prospective rewards can be substantial.
Why Must a Business Buy Real Estate?
Professionals believe purchasing business real estate provides greater control over the the real estate portion of overhead expenses, versus leasing, which could raise your rental costs when the lease rolls over at a period when the market is hardly favorable. The second benefit is gaining investment benefits – for example, property depreciation for tax-related purposes and, in time, appreciation of assets.
There are several factors to look into when choosing a commercial real estate property to purchase. One, that classic adage “location, location, location” is equally true for commercial real estate as it is for family homes. Here are other crucial points to consider:
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 should be convenient to all these people if they are to come to you. At the same time, you may need access to rail, highway and shipping lanes, depending on the kind of business you are engaged in.
Once you have identified a prospective area, check how the property was used (think wear and tear), and whether environmental or potential liability issues, like lead paint, are in the picture.
Serving Your Purpose
If you are a law firm, business office space is obviously what you need. If you are a product manufacturer, you should 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, when planning to make any changes or alterations to the property, note that they will be subject to restrictions dictated by zoning laws, building codes or covenants. For instance, when buying a building in a historic area, you may have to follow rules when you want to modify the facade.
Parking and Access
You must ensure that your customers will be able to park conveniently and that access is compliant with the Americans With Disabilities Act and other similar laws.
Leasing or Expansion Options
Finally, entrepreneurs usually have a positive outlook about growth, and this only means that the likelihood of expanding is a consideration, as is the opposite. When purchasing commercial property, determine whether or not you can lease out extra space, just in case your growth predictions fall short.