Commercial Property……… Not Without My Agent
Have you ever considered owning, investing or leasing commercial real estate? Commercial real estate is defined as any non-residential property used for commercial profit-making purposes. It includes; office, retail, industrial, institutional, land, multi-family residential, and hotel/motel properties. All aspects of acquiring or leasing a commercial property are much more complicated than residential and require a skilled team of professionals to ensure a smooth transaction.
Why Should I Invest in Commercial Property?
There are many reasons to purchase a commercial property:
- As an element of your overall investment strategy
- As the location of your business, this will help to ensure cost certainty
Take Your Time and Plan
The challenge with buying, selling, or leasing a commercial property is that it is more complicated than when one is dealing with residential proprieties. The amount of money required is significant, and if you are not successful, the financial loss can be devastating. Your first step should be to find a Realtor who has experience in commercial real estate. They will provide you with information on current market conditions and trends, available inventory and the logistics involved in procuring your commercial asset.
Your Realtor will be your point person on the team that you need to successfully navigate your way to a successful transaction. The team will include;
- A lawyer, with experience in commercial properties
- A mortgage broker
- An accountant who can help you understand the financial implications
- Architect and/or Planner
Important Financial Planning
Always have your Agent and accountant help you know all the financial aspects of a possible purchase. This information is found in a Pro Forma Statement. This Statement is a summary of all the essential economic issues of the property and will help you with your planning. Always review this report so that you understand it and are comfortable with the assumptions used.
What Do You Want?
You must conduct an analysis of what you want and why.
- Do I want to lease or purchase a property?
- What Return on Investment can I expect?
- How should I own the property, as an individual or corporately?
- How many square feet do you require now, and what about future expansion?
- What is the best location? Do I need easy access to a major highway or the LRT (Phase 1 and 2) or busses?
- What are the development plans for the area?
Make a Plan and Move Forward
When all of the information has been gathered and analyzed, it is time to make a decision. If you decide to move forward, then you will be well prepared to make a smart commercial investment with minimum risk. The commercial property sector has excellent investment potential. Always remember it is more complicated and will take longer than you have planned. Do not rush and make sure you consider all the factors.