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. Still, on the other hand, we are all aware that the possible rewards can be huge.
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. 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 crucial points to consider:
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 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.
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.
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, 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 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
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.