Buying or leasing commercial real estate is quite a daunting prospect if you’ve never done it before. The amounts are typically much larger than when purchasing a home, and there are many more details to attend to as well.
Here are 5
tips for buying commercial real estate successfully in the United States.
1. Get a Good Sense of the Local Market
where to situate a new supermarket or lease an office building is affected by
the local market for that area. Is it an ideal place to be situated, or is it a
poor one? Is it up and coming, or going downhill – which explains the
business owner, HoomanNissani, has completed several deals
in California over the last two decades. He mentioned that “It’s beneficial to develop an
understanding of the local market. This way, you know if the recommended
location given by the realtor is a good one or not.”
2. Hire an Accountant
going to be dealing with real estate loans and the complexities of the U.S. tax
system, then it’s advisable to use the services of an accountant.
accountant who has experience working on the commercial real estate side can
provide some insights into different financing options and how to best
structure an acquisition to protect the company.
3. Don’t Rush into Deals
hard to find the perfect warehouse, vacant office or land to seek permission to
build a new supermarket can lead to problems.
an office that’s not got a great location or is too small for an expanding
which will be outgrown within 6-12 months is going to be a mistake. It’s better
to wait for another, larger office to come on the market and lease or purchase
that one instead.
There is an
element of ‘hurry up and wait’ with commercial real estate. Nevertheless, sometimes
there are more vacant assets available later when waiting it out.
4. Get Help with the Legal Side Too
questions are many when it comes to leasing or purchasing commercial interests.
Unless you already have an in-house counsel, it’s necessary to hire a lawyer
(preferably one with commercial real estate experience).
The legal and other issues that may crop
potential insurance difficulties, investment risks, permits and title, and
environmental factors to name just a few. For a more complete list and a
realistic assessment, consult with an attorney to ensure the company isn’t
stepping on a legal landmine.
5. Know Your Budget
to go a bit crazy on price when another real estate is presented by a realtor
that’s outside of the budget. For this reason, it’s important to set a range
that’s acceptable and know what is too high. This way, a commercial realtor can
be instructed specifically to only present relevant deals that fall inside
Buying or leasing
commercial real estate is a stressful thing to do. It’s important to get it
right the first time, so getting the right people in the team is extremely
useful to avoid mistakes.