Purchasing commercial real estate is a convoluted venture that is tough even for the pros to time right to increase their investment value.
Also, it a project that is overflowing with risk, with agents, buyers and sellers, and renters alike having to bear the brunt of sudden increases or decreases 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. The other advantage is to enjoy investment benefits, such as property depreciation for taxation purposes and, eventually, asset appreciation.
When buying business real estate properties, there are different factors that must be looked into. First off, the age-old adage “location, location, location” couldn’t be truer for commercial properties as much as it is for homes. Here are other essential considerations to be made:
The most significant issue is still the location of the property. You need to be as close as possible to your clients, workers, and suppliers. You should be convenient to all these people if they are to come to you. At the same time, you may need access to rail, highway and shipping lanes, depending on the kind of business you are engaged in.
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 your business provides accounting services, you obviously need business 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 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.
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, 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.