As a business owner, if you plan to have any portion of your business not taking place online, you likely then have a need for some office space. If it’s just you, you can probably make do with just working from home, saving you from needing to find a sole location for your business. But if you have employees, a lot of inventory, or meet with clients often, you may want to look into getting some commercial space in which to conduct business.
While this can be a huge benefit to both your business and potentially your investment portfolio, getting into the right space for the right price isn’t always easy. To help with this, here are three tips to ensure you make the best choices when it comes to acquiring commercial property.
First, Should You Buy or Rent?
Before you can even begin looking into financing or properties themselves, you first need to uncover if it’s really the best for you to purchase a property or to simply rent out commercial space for your business. According to the staff at Inc.com, purchasing commercial property can be a big gamble because you never know how the real estate market is going to perform. If the market is performing poorly, you could seriously regret making this kind of investment. However, if the market is favorable toward purchasing property, your business could really benefit from owning your own space, and even make a killing if you are able to rent out some of that space as well. For these reasons, be sure you do your homework thoroughly before making the decision to buy or rent commercial business space.
Understanding the Risks of Owning Commercial Property
If you’ve decided that purchasing commercial property is going to be the best option for you, the question then becomes gaining as much knowledge about this investment as you can to minimize the risk to your business. According to Matt Larson, a contributor to Nolo.com, investing in commercial properties has many risks like a large time commitment, needing potential help from professional contractors when issues arise, having to pay a large amount of money up front for your initial investment and more. However, if these risks seem like something you can be comfortable with, investing in your own commercial property may be the perfect choice for you.
Getting the Best Deal
Now comes the time to purchase your property. This is where getting a killer deal will make all the work you put into this decision worth it. According to Brian O’Connell, a contributor to Investopedia.com, getting a great deal when purchasing commercial property is all about understanding “key commercial real estate metrics”. These include net operating income, cap rate, cash on cash and more. By coming to the table prepared with the best information possible, you put yourself in the best possible position to make a great deal when buying commercial real estate.
Just like all your other business decisions, making a smart choice when it comes to commercial real estate can either make or break your business. Use the tips mentioned above to get the property you need at a price you want.