When buying commercial real estate, investors must practice due diligence. Otherwise, they risk losing a hefty sum of money and facing unfavourable circumstances as opposed to enjoying the fruits of their investment.
That’s why buying commercial real estate needs time, patience, and tons of planning. Nevertheless, for those who have the means, buying commercial property is still better than renting one out because acquiring real estate is less costly compared to just being a tenant in one.
What makes a winning commercial real estate purchase? Here are 5 steps to achieve success.
- Arrange finances
When it to commercial property acquisition, affordability plays a huge factor in getting the best deals. Prior to taking out a loan from the bank, business owners must first determine their financial capacity and work with an accountant to set a realistic budget. Financial statements and proof of generated profit are important documents loan officers would want to take a look at to determine how much will be approved. Preparing these in advance is important in ensuring investors get the loan they want or need.
- Study the local property market
Business owners are often quick to make the decision to buy property, but before they jump into the market, they must first study the location where they are looking to buy. Every local market comes with its own tax rates, land laws, as well as environmental issues. A commercial real estate broker Victoria can be a valuable resource when studying the local market. Another point of interest is the availability of skilled labour in the area. Investors must look into the local property market they are considering entering before they make a purchase.
- Consult tax experts
Accountants who are well-versed in the ins and outs of real estate tax implications play a vital role in ensuring business owners get the best possible outcome in their transaction/s. When playing in the commercial real estate market, business owners should have a reliable accountant to turn to for important tax and financial advice.
- Plan the layout
Commercial real estate, no matter the condition, will definitely need renovation and customisation according to the needs and nature of business of the new owner. Investors need to consider the layout well ahead of time and plan the intended design so that work can start on it once the turnover is completed. Adopting the right layout at the very beginning will help decrease operating costs and improve productivity and operational efficiency.
- Look for quality builders
Once the property has been acquired and the layout finalised, it is time to choose builders who will get the job done. The guiding principle business owners should follow in their quest for good builder deals is “less money, less time, and more value.” Quality builders have good reputation and are responsive to client needs. A background and credit check will also help determine the reliability and work history of builders.
While there are no surefire recipes for guaranteed commercial property acquisition success, these five tips are a good way to start on the right foot.
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