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.
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
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. One, that classic adage “location, location, location” is equally true for commercial real estate as it is for family homes. Here are other important issues to take into account:
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 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.
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 financial services company, you clearly need commercial office space. If you are into manufacturing, you require an 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.
Access and Parking
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 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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