Just as with buying an investment property or a raw piece of land, buying a commercial property has its own set of considerations. Take a look at our tips for buying a commercial property so you’ll end up with the best piece of property for your future business.
Tip no. 1: What’s it for?
You probably already have an idea, but determine what you will be using the property for. Commercial property can mean many things, including a retail business, residential apartments, a hotel, an office building, or an industrial factory, among many other things. Whatever you’ll be using the property for, make a list of things you need in order to do well in business. Does it need a big parking lot? Access to a major highway? A large piece of land?
Tip no. 2: Risks vs. Benefits
Of course, going into any sort of business means taking a look at the pros and cons. You’ll want to do the same for a commercial property – weigh the risks and benefits of buying a commercial property vs. renting one. You’ll also have to consider the location, the future success of the business, and all of the costs associated with buying a commercial property.
Tip no. 3: How Much Time do You Have?
Buying a commercial property means taking a longer time to turn a profit since most of these properties cost much more than a home or a piece of raw land. So, what is your time commitment? How long do you plan to stay in the building? When could you pay it off? It’s also a smart idea to create a detailed expense report and an income analysis, so you can make a solid plan for the future.
Tip no. 4: Surround Yourself With the Right People
If you’re in business, chances are likely that you’re not an expert in commercial real estate (well, unless you are!). Don’t worry, just get the right people around to help you! You’ll need a real estate broker, a real estate attorney, a certified public accountant (CPA), a lender, an insurance agent, and a lawyer – of course, all depending on what sort of property you’re after. Each of these professionals can help you make the right decisions during your journey of purchasing commercial real estate.
Tip no. 5: Seek Variety
During your property search, take a look at a variety of different types of properties, and get to know the zoning laws for the ones you’re interested in. Take a look at the surrounding areas, and get an inspection of the property.
And of course, you’ll want to consider the location – will it work for the type of business you’re wanting to open? Evaluate the physical condition of the property. Will it work as is or will you need to invest in repairs, upgrades, or structural changes? Also, consider any limitations on the exterior and interior – such as room for ample parking, curb appeal, and areas for expansion, if necessary.