If your company rent a commercial space, it may be an advantage to purchase your building and stop paying rent. Here are some points that you have to consider on before buying commercial property.
Do you have cash?
Most of the commercial building purchases require 20 percent down payments. If your company cannot afford this down payment, you may not be ready for property ownership right now.
Can you afford the mortgage?
Insure that you have calculated your monthly costs whether you took on a mortgage, or it will create cash-flow problems.
Can you use the write-offs?
If your business is going well, property ownership may help to decrease your tax burden. You may write off a portion of the building's cost each year in the form of depreciation. Another possibility is to rent part of the building to the company, a structure that has some tax advantages.
Do you need the control?
Some businesses want to change the look of the office spaces radically as they create their unique company identity; they want to paint all the walls black, or to remove walls, or install special machinery that would be difficult or expensive to remove. If you want to do similar changes in your store or office and a landlord does not agree, purchasing a building may be a better option than renting.
Is a good building available?
Market research will help you to find prices and interest rates on commercial property. Although you have to consider that moving to a new location will add to your business's costs and require marketing to make sure your customers know where you've gone.
Will it help you to grow?
Consider your company's growth plans before purchasing property. If your company expands fast, purchase of the small storefront may only create problems, when you need to move to larger quarters. On the other hand, if your purchase a building with multiple spaces and the other slots are currently filled with other tenants, you may be able to grow in place by regularly ending leases and taking over more space.
Is it a good investment?
Try to take a detached look at the property with this in mind. Is it in a prosperous neighborhood? Is this commercial district full of tenants, or half empty? Are prices tending to be up or down? Is the building well-maintained? How long are you planning to stay in the space; will it be long enough for the property to go up in price? Could you easily find a tenant in order to rent it out if you move? Can you be a landlord?
Whether you have decided to rent our part of your building, you have to consider that you will need to deal with your tenants problems, building improvements and rent rates. Will this additional responsibility fit into your schedule? Are you planning to deal with all these issues by yourself or you are going to look for a good property manager?
An experienced commercial realtor will help you to understand market trends in your area and find out appropriate prices for local commercial property. If you have decided to buy, thoroughly compare several properties to make sure that you have found the best location at the best price.
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