If you’re considering looking for business real estate, consider using an agent who has experience in commercial real estate. The agent will be able to guide you through the process and will be able to show you only the properties that meet all of the guidelines you have set up.
Here are a few things to keep in mind when considering the purchase of commercial real estate for your business.
Is It Cost Effective?
Some small business owners want to hurry up and buy because they see business real estate as yet another investment in their business.
This is sound thinking so long as the cost of owning the real estate isn’t going to put a squeeze on the business financials and force cutbacks in areas that are directly related to the flow of revenue into your small business.
There are a lot of costs involved with owning versus renting, and all of those expenses should be taken into consideration before you decide to take the plunge into owning business real estate.
Location
Depending on your type of business, location can be crucial to the success of your business.
One man owned a successful barbershop business. He rented space inside a busy mall for over 10 years. He had saved a lot of money over the years and decided it was time to buy his own commercial real estate instead of paying rent each month.
He couldn’t afford to purchase in an area that had as much traffic as the mall, so he settled on an area that wasn’t as busy. He was pretty sure that his base of loyal customers would follow him. Some did, and some didn’t.
That hurt him, but what hurt even more was that he had virtually no new customers and no walk-in appointments. After taking a loss, he sold his property and went back to renting space in a mall.
Even if you don’t have to consider location in such a way, it’s still important for other reasons. If your employees are used to a short commute, it’s not going to be good for morale for them to have a much longer commute.
Also, if you’re moving to a different city there could be tax implications, so be sure to research all of that before making a move.
Improvements Needed
What improvements are needed in order to make the property suitable for your business? Will you need to continue renting for a period of time while necessary improvements are made?
Can you afford to rent and pay the mortgage for the needed length of time without crippling your business?
Long Term Suitability
Will this business real estate be suitable for the long term? Purchasing property that is only going to work for you for a short time isn’t always the best bet.
It can take years for business real estate to sell, so you could end up stuck with property that is no longer useful to your business.
The purchase of commercial real estate has the potential to be a great investment. Just be sure that you do all of your homework, and don’t rush into buying too soon.
