Tips for Buying Commercial Real Estate
Buying business real estate is an intricate endeavor that is hard even for the experienced to time right to boost 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.
Reasons For a Business to 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. 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 several factors to look into when choosing a commercial real estate property to purchase. 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:
The location of your property remains the biggest issue. You have to be within close proximity to your suppliers, employees, and most importantly, your customers. You have to be convenient to all who are part of your business, if you’d like them to remain. But depending on the nature of your business, you may need access to highway, rail, and shipping lanes too.
As soon as you have pinpointed a potential area, research about the property, its wear and tear, and any possible environmental issues it may be involved in, including whether there are potential liability issues, like lead paint or asbestos.
Serving Your 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 whether it’s because of building codes, zoning laws or covenants, there could be alterations that you are not allowed to do 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
Finally, with the typical positive growth outlook they have, entrepreneurs are likely to consider the possibility of expanding, as well as the total opposite of this scenario . When purchasing business property, find out whether you have the option to lease any extra area, just in case business doesn’t work out as rosily as you have predicted.