Tips for Purchasing Business 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.
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?
Experts believe a commercial real estate purchase gives more control over a business’ overhead costs, whereas with leasing, your rental costs may go up with the lease rolling over with at a time when the market is least profitable. 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 important issues to take into account:
Where the property is located is still the main issue. You’ll want to be as close to your customers, employees, and suppliers or vendors as possible. You must be convenient to everyone involved in your business, if you want to keep them there. However, depending on the type of business you have, rail, highway and shipping lane access may prove important as well.
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.
If you are a financial services company, you clearly need commercial office space. If you are into manufacturing, you require an industrial space. In any case, make sure you do some research and learn about the area’s zoning requirements and that these will not pose problems with what you need 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.
Access and Parking
Choose a property that offers parking convenience to customers, as well as compliant access for beneficiaries of laws such as the Americans With Disabilities Act.
Expansion or Leasing Opportunity
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 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.