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. But of course, we all know that the potential rewards can be considerable.
Why Buy Business 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 various factors to look into for anyone planning to buy a certain commercial real estate property. 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:
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 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.
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).
Serving Your Purpose
If you are a law firm, business office space is obviously what you need. As a manufacturer, you have to look for 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 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 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
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
Lastly, entrepreneurs are generally optimistic about growth, and this the possibility of an expansion will be considered, along with the flip side. 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.
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