Buying commercial real estate can be very different from buying your home. The article below details some tips you should keep in mind when shopping for commercial real estate.
Location is just as important with commercial real estate as it is with residential properties. What type of neighborhood is the property in? Also review the expected growth of other similar communities. You want to make sure that in 5 or 10 years down the road, the area is still a descent and growing area.
There are many things to consider when determining the best option between two commercial properties. When choosing between the two, think big! Finding the right bank to finance you might be hard, even if you are going for a smaller building. This just reflects the general advantage of buying anything in bulk; when you buy a property with more units, you get a lower average price for each one.
See to it that the price that you ask for in real estate is realistic. There are a variety of different factors that go into determining a property’s value.
Get the credentials of any person who will be doing an inspection on a property you are trying to buy. Pay particular attention to credentials when it comes to pest inspections, since it is not uncommon to encounter people working in pest removal without a license. This will avoid bigger problems in the post-sale.
Confirm that basic utility services are already situated at the commercial property. Your business may have unique utility needs, but at the very least, you probably require hookups for electric, sewer, water and most likely, gas.
Consider the surrounding area when you buy a piece of commercial real estate. For example, if you’re offering high-priced goods or services, you might want to purchase property in wealthier areas where people are likely to be able to afford to buy from you. Or, if you are offering a service particularly attractive to the less wealthy, you should purchase in a less well-to-do area.
When you are negotiating to rent a commercial property, try to have the lease modified so there are few events that are considered to be defaulting on the lease. That will cut down on the likelihood that the tenant defaults on a lease. You want to ensure this doesn’t happen at all costs.
Do a walk-through and close evaluation of each property you are considering. Look into having a professional contractor accompany you as you take a look at the properties you’ve been thinking about purchasing. Once you have all the details, start drafting proposals and enter negotiations with the seller. Closely review any counteroffers you receive prior to making a final decision. Remember the decision is an important one, so take your time.
Keep your focus on the largest issues when writing your letters of intent. Keep it simple and save the smaller issues for later in the negations. It will be less stressful to negotiate and can also make it easier to come to terms on the smaller things as well.
Establish your goals and needs before you start looking at properties. Write down everything you need in a commercial property, such as number of conference rooms, offices, restrooms and how much square footage.
Commercial Real Estate
As you can now see, there are many things that you need to consider, when buying commercial real estate. Use the ideas in this article to inform you as to how to approach your next commercial real estate purchase.