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.
It’s likewise a project abundant with risks, with the lows and highs in demand affecting everyone, from buyers to sellers to renters and all agents in between. 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. The second benefit is gaining investment benefits – for example, property depreciation for tax-related purposes and, in time, appreciation of assets.
There are various factors to look into for anyone planning to buy a certain commercial real estate property. One, that classic adage “location, location, location” is equally true for commercial real estate as it is for family homes. Here are other essential considerations to be made:
The most significant issue is still the location of the property. 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. 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 your business provides accounting services, you obviously need business office space. If you are into manufacturing, you require an industrial space. Either way, research about and learn zoning requirements in the area, making sure thesewill let you do what you want to 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 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
Lastly, entrepreneurs are generally optimistic about growth, and this the possibility of an expansion will be considered, along with the flip side. 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.