Experts like Joseph Johnson Welfont understand that the commercial property market is far more complex than the residential market in many ways, and if you are considering the purchase of commercial property you should be sure to work with an experienced and reputable team in order to be sure that you have all of your bases covered. Here are just a few of the things that you should bear in mind about purchasing a commercial property.
You need to have a plan
Whether you are considering a commercial purchase as an investment or for use by your own business, you need to have a careful business plan. This involves thinking a few years out about how the property will or can be used, how it impacts on finances of the company or the balance of your own investment portfolio, and potentially your plans for divesting yourself of the property. Careful planning must take account of contingencies such as changes in your business’ orientation, market changes that may impact financing, and future investments into the property.
You need to find the right property
Once you have developed a plan, you are in a position to evaluate properties against your needs. There is a whole range of issues that should be taken into account as you determine if a property is a good fit for you. This will definitely include an analysis of the local market – especially if you are making a purchase as an investment, you will want to understand the potential for increased property values. You should also pay attention to things like local tax rates, potential environmental issues, transportation routes, infrastructure development and local demographics. Be sure to consider the surrounding properties as well as developments there could impact the value of your own property.
You need to get expert evaluations
Once you have found a property that seems a good fit for your plans, you need to spend whatever time it takes to make sure that the property is sound. Arrange engineering, electrical, environmental and architectural inspections. Be sure that any problems they find are property values so that they can be accounted for in the offer you make. Get a sense of the life expectancy of major property components so that you understand when you may need to repair or replace roofs, plumbing or electrical systems, foundations, and so on. If you plan to repurpose or renovate the property, make sure that you are able to do so by checking building specifications, zoning regulations, and relevant by-laws. As much as possible, try to investigate municipal plans for things like re-zoning or infrastructure developments.
Once you have a plan, a company with expertise in commercial real estate will be able to assist you in finding the right property and conducting the necessary due diligence. This can be a time-consuming process but it is one that should not be rushed. Given the significance financial investment that a commercial property represents, the last thing you want to see happen is your personal or business liquidity frozen in a property that requires unanticipated repairs or that loses value as a result of the sewage plant that gets built next door. Do your homework and take your time!