Buying Commercial Real Estate? 5 Things to Consider
Are you on a commercial real estate search? Whether you are looking for a warehouse or a salon, finding and buying the right commercial real estate can be a challenge. To hit the real estate jackpot now and continue to be satisfied with the property in the future, you need to consider a number of different factors. Here is what you should know before you go on a search for the perfect commercial property for investment purposes.
1. Square Footage is Key
While square footage is not the biggest factor in a home purchase, it is huge when it comes to buying a commercial property. That is because you will generally charge rent based on the square footage. Look at the property's location and usability, but also factor in the overall size of the property as you debate between several real estate options.
2. Look at Location in a New Way
When you are buying a house, you know that location is important. You want to be near recreational activities, schools, and work. When you are buying a commercial property, you need to see your location with new eyes. Consider who is around you and how they complement or detract from your business development. Think about parking, foot traffic, and transit access to your property. Consider how people will be able to ship goods into and out of the property. Most of all, know that the desirability of locations can change, and a neighborhood that is hot today might be not so hot in the future. Large and small geographic factors all become important when you are looking at commercial properties.
3. Examine Properties With a Creative Eye
When you are looking for commercial real estate, you probably have a long list of requirements. Look at properties with a creative eye to see the potential for business in those properties. Who will be attracted to these properties immediately, and how can you broaden that list? Renovation is more of a given for commercial property purchases.
Look at the problems and the potential of each property, and weigh them carefully. Look for damage that requires repairs and know how to assess risk accurately.
4. Consider Zoning Restrictions
What are your tenants allowed to do in a specific area of town? Zoning restrictions could change the nature of the businesses you attract or the hours they are allowed to operate. You are especially vulnerable if your business attracts a lot of traffic, makes noise or smells, or operates at unorthodox hours. Always confirm that the zoning restrictions will not restrict your business before you buy.
5. Plan for Expansion
You are looking for the right property, but will it be the right property in a few years? As you invest in commercial real estate, you need to know who the current tenants are and whether they plan to continue renting that property. How will your tenants grow and change over time? Can you renovate the property to upgrade it or add more space?
At Open For Homes, we want to help your business grow. Take a look at the blog at Open For Homes and see how we can help you shape your commercial real estate search.