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.
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. But of course, we all know that the potential rewards can be considerable.
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.
When buying business real estate properties, there are different factors that must be looked into. First of all, the traditional concept of “location, location, location” is perfectly applicable for business properties as it is for residential. Here are other essential considerations to be made:
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 have to be convenient to all who are part of your business, if you’d like them to remain. 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.
Fitting the Purpose
If you are a law firm, business office space is obviously what you need. If you are into manufacturing, you require an industrial space. Either way, research about and learn zoning requirements in the area, making sure thesewill let you do what you want to 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. When modifying the facade of a building in a historic area, for instance, there may be specific guidelines to follow.
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.
Leasing or Expansion Options
Lastly, entrepreneurs are generally optimistic about growth, and this the possibility of an expansion will be considered, along with the flip side. When purchasing commercial property, determine whether or not you can lease out extra space, just in case your growth predictions fall short.