Purchasing commercial real estate is a convoluted venture that is tough even for the pros to time right to increase 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. Still, on the other hand, we are all aware that the possible rewards can be huge.
Why Must a Business 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. 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 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. At the same time, you may need access to rail, highway and shipping lanes, depending on the kind of business you are engaged in.
After determining a general location, check the property’s history in terms of wear and tear, environmental issues or possible liability issues (for example, the use of lead paint in older properties).
If you are a law firm, business office space is obviously what you need. If you are a product manufacturer, you should 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, 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. When modifying the facade of a building in a historic area, for instance, there may be specific guidelines to follow.
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, 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 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.