Five Important Tactics for Investing in Commercial Property
Investing in property can be a risky venture if you don’t know what you are doing. Not every piece of real estate that says Commercial Property For Sale is a good investment. It takes planning and without doing your homework before you make that first step you can quickly find yourself in over your head. But if you do your due diligence first, get your investment partners lined up and ready and remember these five important tactics before you start, you can make some good investment choices that will pay off well in the long run.
In the end, it doesn’t really matter if you want to buy some commercial property as a long-term investment or because you would rather own your own building and are an entrepreneur. In either case making sure you have considered every angle of this investment is key to your success. While owning is always better than renting, for many businesses it takes a big commitment to buy that warehouse or storefront building, so plan ahead. Here are a few tips on where to start.
Get Grounded in the Local Real Estate
No matter if you have been renting in the same area, owning a piece of commercial property comes with its own set of rules. You will need to know and thoroughly understand everything from tax rates and the current labor market to environmental laws for the area. All of these could have a huge impact on your investment, so bone up first.
Line Up Financing
Don’t go into this unless you have sat down with your accountant and created a reasonable budget to see how much building you can afford. Before you can negotiate a loan for the building you will need to meet with bankers and have the financials in order. They will want to see detailed reports that show how you are going to finance this investment. Don’t forget to shop this idea around to several financial institutions to see who can give you the best deal. You are going to be doing business with them for a long time, so make sure that you know you can establish a good working relationship with them.
Get Help with Tax Implications
Taxes for a commercial building are often quite complicated. To be sure that you know exactly what you are committing yourself to for the next few years, hire a tax accountant. It is best if they are familiar with not only the area you plan to buy in, but also the industry you are in. This will allow them to look at the big picture of taxes and liability.
Plan the Layout and Hire Experienced Builders
If you are planning to build your own instead of purchasing a pre-existing building, take control. Make sure that you have a good handle on the overall layout of the building as this will be critical to the success of your business operations. Make sure the builders you choose are well known in the area, have a good reputation and know and understand your industry. When in doubt, check them out thoroughly.