The term commercial real estate refers to property that is used for commercial purposes. This could mean storefronts, land with the potential for profit, and rental properties. Examples of commercial property would be office buildings, malls, grocery stores, and more. Commercial properties are also divided into five categories such as multi-family, office, hospitality, retail, and industrial.
Commercial real estate is subject to different laws, financing, and taxes than residential real estate. While the purchase of this type of property is an exciting investment, it can be a lengthy and complicated process that the average person isn’t familiar with. Since there is so much to be known before making such a big decision like this, here are a few tips for purchasing your first (or next) commercial real estate property.
Know Why You Want to Invest
Before you begin searching and investing time looking for commercial real estate, it’s vital to ask yourself why you are wanting to make this investment and if it’s right for you. If you are unsure of your ultimate goals, you may want to reconsider. Here are some questions you may want to ask yourself:
- What kind of property do I want?
- What do I plan to use the property for?
- How much of a down payment can I make, and is this feasible?
- Will I need a property manager?
Arrange Your Financing
It is important to ensure that you can afford your investment before starting your search. Securing financing ahead of time allows you to create a budget and compare your financing options before committing to a deal. To find the best rates, speak with several lenders and consider various loan types.
If you know what kind of financing options you have before you begin your property search, you will know exactly what you can afford and the process won’t be stalled.
Do Your Due Diligence
When you begin your search for a commercial property, your real estate agent will show you quite a few before you settle on one you think is right for you. Refrain from feeling rushed to purchase the first one you see.
It is important to consider the price, allowed uses, condition, and location. In areas near downtown, hospitals, universities, and busy areas, properties sell more quickly and for a higher price. Ask yourself some more questions such as:
- Is it worth taking risks for the potential rewards?
- Is there another property that would suit my needs better?
- What has this property been used for in the past?
- Is there any maintenance that would be required immediately?
316 Realty Group is Here for You
It goes without saying that identifying a property to buy can take time, a lot of money, and the help of a professional is definitely needed. Finding someone who is aligned with your goals is important. Finding and purchasing commercial real estate is a complicated process with many facets, and you’d be better off working with an expert than trying to figure it out on your own.
316 Realty Group offers commercial real estate services in the greater Houston, Dallas / Fort Worth, Austin, and Waco markets. You can rely on our team to help you develop an investment strategy, search for properties to purchase, analyze the deal, acquire concessions, negotiate the terms, and identify the best options. Contact us today, we look forward to working with you!