Buying commercial property can be a good move
for a small or mid-size business in the long run. When you buy property, you
have better control over the price of real estate overhead (unlike when you
lease a property). However, buying commercial real estate tends to be
challenging because it is more complicated than purchasing a residential
property. It’s always a good idea to work with a broker. You also need to keep
these things to keep in mind if you are thinking of investing in commercial
real estate:
- Reflect on the
needs of your business – There is no sure-fire way to buy
commercial real estate. Each business will have a different set of
needs and requirements. Hence, be sure to identify and understand
potential risks associated with the location, liquidity, cash flow, and
the value of the property.
- Find good
financing company – Commercial loans are different from residential
loans. Down payments tend to be higher, so you will need to shell out more
compared to the amount you are likely to pay when buying a home. Hence, it
makes sense to ask around and find different lenders who can give the best
rates.
- Prepare to lose
your due diligence money – Get an appraisal, have the property
inspected, and perform other inspections and tests required by the law. Be
prepared because these services will cost you. Sometimes, after a test,
you may find the property undesirable. Be sure you have enough funding for
these expenses.
- Work with the
right people
– Find the right lenders and investors to work with when purchasing
commercial property. Establish a good relationship with them, so you could
get better rates and deals that can help you buy the property easily.
Consider hiring reputable finance and
mortgage brokers who practise a personalised approach to helping their clients
achieve the best outcome for their business finances. Make sure that they have
years of experience in commercial property finance.
