Buying real estate has always been and will continue to be a huge decision one has to make as it’s like entering into a new venture. Purchasing the right commercial property can require a bit of ‘homework’ since you’re investing both time and cost.
All the parties involved, buyers, sellers, agents, etc. are exposed to the risk of demand and price. Before buying a commercial property, it is essential to evaluate the various risks factors involved. Each element must be studied carefully before making any decision. As someone working in the real estate industry for over eight years, here are some important factors I recommend you to consider before buying a commercial property:
Location is a crucial factor when purchasing industrial real estate. Locality is key to the majority of your customers so it should ensure they can get to your premises at ease while access to major routes is required for dispatching products. Think logically about the purpose of the premises, if your clients visit frequently then you have to buy real estate on a central location, however, if you are connected with your clients remotely, an area outside town will be better and cost-effective.
Studying the market dynamics would be yet another number game; it helps you to understand the current trend. Before reaching your decision, you should analyse the market performance of the premises over the past three to five years, the expected forecast, rent rolls, tenant profile, etc. that will give clarity on the financials. You can consult a commercial real estate agency for all of these to enable well-informed decision, before making a purchase.
Business Growth Potential
Business Growth Potential can affect you in many ways, you should not be buying spaces that are either too big or too small for your business, but while buying commercial property, you should consider buying space with room for between 20-30% initial growth rather than buying just enough space for your current business need.
While a cost tends to increase with the presence of facilities in a building, its benefits tend to override the value. Having proper amenities in your office tends to attract more clients and top talents. Some of the must-haves amenities are:
- Conference facilities
- Reliable, fast Wi-Fi
- Easy access to parking and transportation
- Dining options
- Fitness Centres
- Outdoor space
- Security measures
Any activity that you invest needs proper budget planning before execution. The investor should properly allocate the budget for the commercial property purchase transaction. Plan beforehand of how you want to make payments – partial or full. However, if you don’t have the entire amount, you can pay the small down payment and take a mortgage for the remaining amount.
Investment has a high level of risk, and since the commercial property is a significant investment, one must exercise due diligence before concluding the deal. You should not rush while taking the decision. Best to consult legal advice to avoid all potential risks. You can also consult the commercial property agency for the correct decision; they have expertise in this field and will make you choose the right property at a better price.