You know business is going well when you’re considering buying a property for operations to run permanently from. Buying a commercial property can be extremely time consuming, not to mention stressful! You will need to make smart decisions, be budget conscious, and have everything planned out for things to run as smoothly as possible. So, if you’re thinking of buying a commercial business property, here is what you need to consider.
Before you even consider buying a property, it’s a good idea to consult your lawyer about your plans. They will then be able to assist you with reading through the fine print and advising you if there are any loopholes with your planned purchase.
What kind of property will you need?
The first thing you will need to consider is what kind of property will you need to successfully run your business? You should buy a commercial property for a reason. The biggest mistake new buyers make is that they don’t have a strategy. They buy a property because they think they have a decent deal, and then they’ll have to think about what to do next. Think about what operations will happen each day, whether you’ll plan on expanding one day by adding more departments, and also ease of use by yourself and your staff members. For example, if you’re distributing products, you’ll need a large warehouse area to hold the products, but you’ll also need offices for internal communications.
Will you be renovating the property?
You may have a property in mind, but is it ready for you to move straight away? If you’re planning on renovating the property, you’ll need to think about the costs that come hand in hand with it such as structure support if you plan on tearing it apart and starting a new, or even commercial excavation services if some of your business will need to run from the exterior of the property such as a car park or show room.
Is the location going to suit customer needs?
A mistake that many investors make when buying a property or land for their business is how convenient the location is going to be for their customers. It’s very likely that your current customers choose to use you over your competitors because of the convenience of location. If you’re not moving far then this shouldn’t be a problem. However, if your relocation is a fair distance away from your current business premises, you may run into problems with losing your customers.
Is it going to be worth my while buying a business property?
The pros of buying your own commercial business property include stability once the mortgage is paid off, and not having to worry about landlords asking you to vacate the premises. However, is this going to be worth your while? The cost of buying a commercial property may put a large dent in your profits and even leave you short on cash. Think about the impact this will have on your business, including costs that may accrue if something needs repairing in the future.
It’s always a good idea to include an experienced and trustworthy real estate agent before making any decisions on buying commercial property. They will be able to scope out the place and tell you whether or not the property is worth it’s listed value. They may also be able to help advise what kind of property you should be looking for.
Can I realistically afford this?
Business may be going extremely well at the moment, and profits may be soaring. However, you need to consider whether you can realistically afford to pay a mortgage on a commercial business property for the next however many years. Especially in today’s economy, and thanks to COVID-19, businesses all over the planet are falling fast. Be sure that you can afford to pay the mortgage and be confident that your business will still be around in a few years time.
Another tip when you’ve made a decision on a property is to negotiate the price! Much like buying a residential property, you’d be mad to dive in with the asking price. Try to negotiate the price down as much as possible!
Buying a commercial business property can be an extremely exciting time! Be sure to think about the points above, consult your lawyer and a real estate agent and most importantly, don’t rush into anything! With these tips and your common sense, you could soon be the proud new owner of your own commercial property!