There are great advantages to buying rather than leasing land or a building for commercial real estate, but several factors should be considered that can affect your financial strategy. If you are uncertain whether a new property is the best investment, this guide details some of the most important aspects you and a qualified design-build firm should research to make sure you’re getting the most out of this new venture.
What Should You Check Before Purchasing Commercial Property?
Depending on what you will be doing with a property, its location needs may differ. For instance, an office building likely needs to be readily accessible to the public but doesn’t need very much land, while a manufacturing plant could require closer proximity to shipping lanes and more open space for storage additions. Consider whether the property you want to purchase has the amenities or potential necessary to help your business reach its goals.
2. Market Value
Have a professional design-build firm analyze the current market to determine if the location in question will give the profit you need to grow, including the potential impacts of layout changes and necessary repairs in the future. If you’re planning to sell the land or building later, a market analysis can help account for the needs of future buyers. Also, even if a location appears profitable today, it could change value in the future, so research past pricing trends in the area.
3. Physical Condition
If you’re buying a building, find out what it was used for and how much wear and tear it has gone through. This will give you knowledge in advance about possible repairs, abatement, or remediation that you will have to deal with. Sometimes, properties come with hidden costs, so having in-depth research done will help prevent you from running into unpleasant surprises.
Applicable zoning laws can limit what you do with a prospective location. For example, if you’re in the industrial sector, it’s necessary to confirm the allowable purposes for the property. Pre-existing buildings may also have restrictions on the kinds of modifications you can make. By understanding the laws in detail, you can save yourself from headaches later on.