Buying a commercial property is an exciting and potentially lucrative investment. But as with any real estate transaction, there are certain mistakes that first-time buyers should be aware of to make their purchase successful.
With the right research and an experienced realtor by your side, you make the right decisions during this process. If you’re looking to buy a commercial property and want to ensure you avoid any costly mistakes, call me today. You can lean on my 20+ years of experience in the Real Estate industry, specializing in commercial real estate. I’m happy to help educate you while finding the perfect property for your business.
Commercial Property Purchase Mistake #1: Not Planning Ahead
One of the most common mistakes first-time commercial property buyers make is not planning ahead. Commercial real estate transactions are complex and require a lot of due diligence to ensure you’re making the best decision for your investment.
Be aware of zoning regulations, potential environmental problems, and other factors that may affect the value or use of the property.
Having a clear idea of what you want to use the property for and what type of return on your investment you’re expecting are also important considerations. It’s best to consult with an experienced local real estate agent or financial advisor before making any decisions so you have all the information necessary to make an informed purchase.
Commercial Property Purchase Mistake #2: Poor Cash Flows
Carefully consider your cash flow when deciding to invest in property. Not only will you have to pay the mortgage each month, but also account for the maintenance and operational costs of the building itself. Furthermore, be sure to calculate an estimate for potential property tax payments that may come up down the line.
Before investing in a business, calculate your overhead costs and verify that you can afford them. A great way of ensuring cash flow is by dividing the net operating income by the property’s purchase price. This will allow you to determine whether or not it is an economically viable investment decision.
Commercial Property Purchase Mistake #3: Not Researching the Location
As the famous saying goes: location, location, location! When purchasing any property, but especially a commercial property, the location is key to your success as a business in the area. You need to be aware of the potential for business growth or decline in the area, as well as any planned developments that could affect your investment.
- If you’re opening a restaurant, research if there are similar restaurants in the area and if you’re nearby large neighborhoods or offices.
- Cost of utilities, equipment, furniture, and decor
Failing to account for these expenses can lead to a costly mistake and may end up eating into your profits even if it’s not until later down the road.
Commercial Property Purchase Mistake #6: Rushing into the Sales Process
I want you to get into a new place and to work as soon as possible too, but it’s important to not rush into the sales process.
When buying a commercial space, take your time to go over the pros and cons of each option before signing any documents or making any commitments. Do extensive research, follow these tips, and consult with a professional like us at Cross Team Realty to get any questions answered and have the peace of mind that you are making the right decision.
Buy a Commerical Property with the Cross Team
Buying a commercial property can be a great investment and a rewarding experience if you do it right. Following these tips will help make your first purchase successful and profitable. If you need assistance or guidance during this process, I’m here to give you the best experience possible.
Reach out to me for a free consultation. I look forward to putting my knowledge to use in getting you started on your journey toward successful commercial real estate investments.
