What You Need to Know Before Buying a Commercial Real Estate Property
3 min.
Buying a commercial real estate property is a significant milestone, but it’s also a large financial investment. Acquiring a commercial property can be a complex process. Today, we’ll help you determine what you need to know before committing to a property.
Below are five steps you should follow when making your investment.
1. Find the Right Location for You
One of the first things to consider is the commercial property's location. You’ll want to consider the ease of access to major roads and highways and the details of the surrounding zoning, ensuring the zoning complies with applicable zoning laws. You’ll always want to determine the parking capacity; will it suffice for the number of staff and customer traffic you project to expect?
2. Define Your Business Needs
Something to consider before looking at commercial properties to purchase is your business needs. It’s important to outline your real estate needs. Here are a couple of questions you can ask yourself to determine a list: What is your budget? How much space do you need? Are you looking for any special features? Where would you be located? What type of zoning is appropriate? Answering these questions will help you and your commercial real estate agent better understand exactly what you’re looking for.
3. Assess Your Property Before Purchase
When you find a property you think is the right fit, have a contractor view the space to assess it before you purchase. This due diligence process can help you to determine if the building is move-in ready or if it requires any renovations.
4. Obtain a Pro Forma
If buying a commercial property from a business, you’ll want to obtain a pro forma from them. This document can provide you with crucial information about the viability of the property. The pro forma is a financial document outlining all the maintenance costs, income reports, and net operating income or NOI.
5. Hire an Experienced Commercial Real Estate Agent
Our final tip is to work with a commercial real estate agent. There are many benefits to hiring a commercial real estate agent who is familiar with and has experience in the industry and the process of finalizing a deal. An agent will be able to provide crucial local market knowledge and have valuable negotiation skills, all while ensuring their client’s best interest are at the forefront of the transaction.
Choosing to invest in commercial real estate can be a rewarding endeavour, but it requires careful consideration and strategic planning. Taking the time to research and consult with professionals will ensure that your decision to purchase a commercial property aligns with your long-term goals.
Reference
Top 10 things to consider before buying commercial real estate. Antham Construction Group Inc. (2016, November 1). https://anthamgroup.com/things-to-consider-before-buying-commercial-real-estate/
Johnson, J. (2020, September 17). Buying a commercial building? here’s what you should know. CO. https://www.uschamber.com/co/start/strategy/considerations-when-buying-commercial-building
Christina. (2022, June 24). 12 questions you should ask when buying commercial real estate - christina. Christina Insights. https://christinala.com/education/questions-to-ask-real-estate-investors/
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