Tips for Purchasing Business Real Estate
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.
Reasons For a Business to 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 other advantage is to enjoy investment benefits, such as property depreciation for taxation purposes and, eventually, asset appreciation.
There are several factors to look into when choosing a commercial real estate property to purchase. First of all, the traditional concept of “location, location, location” is perfectly applicable for business properties as it is for residential. Here are other important issues to take into account:
Where the property is located is still the main issue. You have to be within close proximity to your suppliers, employees, and most importantly, your customers. You must be convenient to everyone involved in your business, if you want to keep them there. But depending on the nature of your business, you may need access to highway, rail, and shipping lanes too.
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 your business provides accounting services, you obviously need business office space. 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 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
You must ensure that your customers will be able to park conveniently and that access is compliant with the Americans With Disabilities Act and other similar laws.
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.