What you need to know before investing in commercial property

The commercial property market is worlds apart from residential real estate. Whether you are considering foraying into the commercial sector for the first time, or you're looking to add another investment to your commercial property portfolio, we have everything you need to know. 

 

 

The first thing you need to look at is your budget for a commercial property. The overhead costs can quickly mount up and you need to have a certain level of liquidity in order to stay on top of the expenses. Purchasing a property for your business needs is a cost-effective solution to leasing from landlords who may increase rentals yearly. However, the risks are far higher than those of a residential property. Plan your budget accordingly, keeping in mind legal fees, business-related transactions, deposits and transfer costs. 

 

 

Areas that are foot traffic heavy are preferred for most properties, regardless of your category of business. The infrastructure surrounding your location is also important, as it lends to the reputation and success of your business. The neighbourhood you choose to operate from needs to be safe, convenient and easily accessible for your customers. 

 

Deterrents would be derelict buildings, construction sites and the like. Make sure you open your doors in an area that's appealing and has an unlimited supply of basic utilities like water, electricity, drainage, parking and more. 

 

 

An essential component of investing in commercial property is choosing the right building for the business. It makes no sense to buy a store that was previously used as a fashion retailer to turn into a restaurant or factory. You would do well to find one that's either a clean canvas or has existing equipment and facilities that fit in with your business requirements. 

 

Ensure that you do a thorough property inspection before taking on ownership. This will give you a clear vision of the wear and tear the property has been through and what maintenance and renovations still need to be done. 

 

By investing in your commercial property you can increase its value for future sale or rental. This makes it a lucrative option for potential investors who want to capitalise on the lawful uses of certain properties. Make sure you are aware of the area's zoning laws and building regulations before you convert or modify the property in any way. 

 

 

Whether you're opening an already successful franchise, adding a location to your portfolio of commercial properties or opening a stand-alone store, your focus should always be on adding zeros onto your initial purchase amount. You should always consider the possibility of expansion ideas and how to build on your current investment. Commercial property has enormous potential for leasing and you should prepare to learn the ins and outs of landlord and seller services. 

 

Ensure the property is well protected and maintained throughout your tenure and you will be more likely to have buyers beating down your doors for the opportunity to make you an offer you can't refuse. 

 

As long as you do your due diligence on your commercial property investment, you will feel comfortable enough to make the best business decision. RealGlen Properties has a team of expert property practitioners with a wealth of experience in the selling and leasing of commercial, industrial and retail buildings. Contact us today to get the ball rolling on your next good move. 

Author REALGLEN Properties