Choosing the right commercial property for your business can be a difficult and time-consuming process. There are some different factors which need to be considered, and the selection and negotiating process can take months. If you don’t know what you’re doing, the whole thing can get rather frustrating. Here are some guidelines to help in choosing the right commercial property for your business.
When you’re looking for commercial office space for which you want to lease out some space to other tenants, the general rule of thumb is “more is better.” Of course, this also assumes that you do not overpay for the property with the higher number of units. But all things being equal, it’s better to have more units to rent out. This way, you can afford to charge less for each unit and still turn a profit.
As the old saying goes, the three most important aspects of commercial property are “location, location, location.” This is especially true with commercial property. If you are acquiring property for any retail purpose, you need to thoroughly examine the area in which it’s located. How much traffic does it have? What is the demographics of the area? Is it a growing or dying area population wise? Do the people in this area have a need/desire for your product/service? All these things need to be examined.
When it comes to getting financing from the bank, make sure all your financial statements are in order. What one of the major criteria banks are looking at is how well organized your company is, because a better organized better run company is far more likely to succeed. If the financial statements appear to be messy, this alone could be enough to cause the bank to turn down the financing.
When it comes to choosing a commercial property broker, be sure you’re dealing with one who is reputable and knows what they are doing. Ask others you do business with for references and find a commercial realtor you know you can trust and have your best interests at heart. If you don’t feel like you can trust the folks you’re working with, then you could be in for some major headaches during this transaction.
Square footages work a bit different with commercial property verses residential. With commercial property, buyers normally look at total square feet and usable square feet. Total square feet is everything including the walls and all other unusable space, while usable square feet is the space that is available to be used to conduct business.
Finally, consider the tax implications of any commercial property transaction. Unlike residential, we are talking about more than just property tax. You will want to go over with your accountant how you will benefit tax-wise from this investment. Often, you will be able not only deduct interest but take a nice write down for depreciation as well.