Tips for Buying Commercial Property

Your corporate headquarters, warehousing and other commercial property are investments, and whether you intend to house your business in them or lease them to other companies, commercial properties may be the most expensive investments you ever make. Therefore, the decisions about what properties to purchase should be well-researched and considered. These are some tips to help you as you search for your commercial real estate investments.

Review Your Goals

Before you make major purchases, especially real estate, you should have clearly defined goals. You should know exactly why you want to invest, what you are looking for and what you will do with the property. You should also set a budget that includes any renovations and other costs, including marketing and legal fees if you intend to lease the property. Don’t forget to set both long- and short-term goals.

Develop a Strategy for Your Investments

Your strategy should cover financing, your approach to finding great properties and how you will earn a profit from them. Also, determine whether your investments will be long- or short-term. Define the types of properties you want to invest in, such as retail, office, warehousing, multifamily or manufacturing.

Get Your Financing in Order

Before you start searching through available properties, you should secure your financing. Decide whether you will use your money, your company’s money or someone else’s money, such as a bank or investor. Make sure you have everything lined up and ready to go.

Tour and Research Multiple Properties

The more properties you tour, the more you can distinguish what you do and do not want. Use this time to clarify your goals and strategy. Eventually, you will find properties that meet your needs. At this point, you will need to conduct some research.

Gather all the financial records on the property to determine profitability. Ask about zoning, neighborhood planning, past and current tenants, property taxes and potential repairs. Have the property inspected and review renovation costs with your contractor. Then, evaluate your options before you decide on the best property for you.

Make a Deal

Once you find your property, the negotiations can begin. Carefully determine your conditions. For example, do you want the roof replaced, will you pay closing costs and do you want a discount due to the repairs and upgrades the property needs? Prepare to concede some of your demands or walk away from the property entirely.

As you search for the right commercial real estate investment, these steps can help you protect yourself and your investment.