Commercial real estate is a hot market, with companies and individuals snatching up properties to make their financial dreams come true. If you’re new to the game, this can seem daunting, so it’s a good idea to step back and consider multiple things about every property.
These are the top ideas to mull over before making the largest deal of your career.
A Fantastic Location for Customers or Clients
Your location makes a huge difference! If you want to create high-end rental suites or offices, it’s a good idea to be in a city instead of an hour away from downtown. Clients and customers want to avoid a long drive to your location, so it’s essential to consider location above all else.
Of course, location affects the price as much as anything else, so find the right balance between what you can afford and what makes sense for the customers and clients you’re trying to draw to your building.
Mail and Storage Resources for Multi-Unit Buildings
When looking at buildings, consider their future use. Will the building handle the number of tenants and people you want? Will it have space for multi-unit mailboxes or storage lockers that ensure renters don’t have to rent storage space elsewhere?
Although these aren’t a big deal in every area, especially since some will put the mailboxes outside as long as they lock, it’s still a good idea to consider how you want your building to appear to renters and clients.
Zoning Laws and Land Use
Can your business legally exist here? In some areas, especially retirement or vacation communities, there’s a limit on how many multi-residential buildings can be created in any city. Zoning laws in almost every city decide what type of building can exist in which areas and what sound absorbing panels or other materials must be included in your project.
Because of this, it’s vital to know local zoning and land use laws before you buy a property or start building. This will stop you from making a huge financial mistake.
Possible Construction Costs
No building is perfect. Unfortunately, you may have to change your property, even if it was a great deal and an excellent location. If that’s the case, consider how much that possible construction will cost. The more it costs, the less valuable the savings are on the building.
Weigh the cost of the property against the price of how many changes and construction jobs need to be completed on it, and consider if this is worth it. It’s important to be realistic and not bite off more than you can chew.
Although you may think you can complete massive projects on your own to save money, it’s better to hire someone to install backdraft dampers than to try and do it yourself and possibly damage necessary equipment that will kill your budget to replace.
The Current Industry Trends
What are the current trends in your industry? If you work in multi-family rentals, does this building have an area that would work for shared office space? If you’re building a space for a restaurant, would this restaurant have a good waiting space for take-out and app-ordered meals?
Look into other modern buildings in your industry, and draw inspiration from them. Would the building you’re looking at be able to handle what you see others thriving while doing?
Rental and Vacancy Rates
If this is a multi-tenant property, whether it’s residential or commercial, it’s essential to get to know how well they’ve been doing lately. How many units are usually rented out? What percent of tenants are long-term? How much have they paid every month?
These can be uncomfortable questions since many people shy away from specifics like this, but you must know if this will be a good purchase.
The Visual Appeal Inside and Out
The property’s visual appeal may not seem like a big deal in commercial real estate, but it’s one of the most important things to remember. Whether you’re welcoming customers or clients into your property, you want it to be welcoming and attractive so they feel like they’re stepping into a nice space. Adding an exterior cladding system can increase visual appeal, but it depends on taste.
Make sure the exterior of whatever building you’re buying will tell people exactly what you see for your business’s future.
Commercial Real Estate is a Huge Investment
Whether this is your first piece of commercial real estate or you want to increase your average profits, think it through before you buy. Follow some of these tips and ideas and bring in millions.
Todd Gillman is a freelance writer that loves sharing his knowledge and expertise on real estate. He lives in Land O’ Lakes, Florida where he enjoys spending time with his wife and researching real estate trends in his free time. Todd’s work as a freelance writer can be found on Building Product Advisor, a new construction industry resource launching in the New Year.