4 Tips For Buying Commercial Real Estate For Your Small Business
If your business is growing and you need to move from your garage to a small building, you may be comparing leasing against buying a building. There are pros and cons to each, so it's a good idea to work with an accountant, attorney, and commercial real estate broker so you make a wise choice.
If you plan to buy a building, you'll want to understand how to structure ownership so you pay the least in taxes, and you'll need good advice from a broker on the right building to buy. Here are four tips for buying commercial real estate for your small business.
1. The Right Location Is Essential
The success of your business could depend on the location of the building you buy. The building should be easy for traffic to access, be in a good neighborhood, and be in a convenient location for your customers. A commercial real estate broker is a lot of help in finding a good location for your business since they are aware of available commercial real estate and the histories of many of the buildings.
2. The Condition Of The Building Matters Too
You may want a new building in excellent shape that is ready to move into right away. However, if you want a custom interior, you may want an older building that's less expensive so you'll have a larger budget for renovations.
Set your budget so you have a price range for your broker to work with when locating properties for you. Also, determine the type and extent of renovations you're comfortable with so the broker knows exactly what you're looking for in a commercial building to renovate.
3. Regulations And Codes Are Important To Know
Your city may have a number of codes that regulate things like the type of business that can operate in a specific zone, the type of signage you can use, and the type of renovations you can make. It's important to know the regulations before you start looking for a property so you don't buy a building you can't use the way you want.
A commercial real estate broker can help with this too, but since you're the one responsible for complying with codes, obtain a copy of your city's regulations and get help understanding them from an attorney if needed.
4. The History Of The Building Could Affect Your Business
You may need to get a survey when you apply for a mortgage. Some commercial surveys include the history of the building, which is helpful to know. However, by the time you get the survey, you've already decided you want the property and you have to pay to have the survey done.
It's good to find out as much as you can about the building before you put in a bid or pay for an inspection and survey. A building that's changed hands often and had a number of businesses fail might not be a good choice since the building may have a bad reputation in your community.
Buying a building with a good or neutral reputation is probably a better idea so your business won't be associated with bad events that happened in the building before you bought it.
For more information about commercial real estate, contact a local company.