5 Things to Keep in Mind When Buying Commercial Property

Residential real estate is incredibly complicated—every homeowner knows this firsthand. If you’re dipping your toes into commercial properties, you should be aware that it is nothing like buying a house. It’s a more complex process, and you need to take the time to do thorough research. Arm yourself with information so you can make good decisions that will pay off in the long run.

There’s no single checklist or formula for buying commercial real estate, but there are a few simple guidelines that all potential owners should follow. To give you an idea, here are five important things to keep in mind before buying commercial property:

1. Consider Your Goals

Before you even begin looking at listings or driving around your area, take a long hard look at the reasons why you’re buying property and what you want to accomplish with it. Some things to consider are:

 The return on investment – Do you have the budget for it? Once you’ve purchased the property, how long will it take for you to get a good return on your investment? Will it give you good cash flow?

The potential for growth – If you are looking for property to build equity, you need to make economically sound decisions. Is there potential for growth in your location? Will your investment be secure? Will you need to hire a real estate management company?

The property type – Are you looking for a space for retail or office space? Maybe you’re considering multi-family, hospitality, or industrial. The more you narrow your choices, the more firm you will be with your decisions.

2. Remember: Location, Location, Location

It’s a cliché in real estate for a reason. Once you set your budget and your preferred property type, your ROI depends mainly on the location. This can be difficult because real estate purchases and investments are meant for the long-term, and there’s no way to predict what will happen in specific locations two or five or ten years from now.

A very crucial thing to consider is the profitability of the existing businesses in the area. Do you need heavy foot traffic? Will you need road signage? Will the location be run down in five years? Consider such aspects before you even think about proceeding with your investment.

3. Consider Multiple Options

Take your time when choosing your property. Never settle for anything “good enough” because you don’t want to waste your time searching. Take a good look around your preferred areas, take second and third looks at your best options, and think through all the scenarios before making a final decision!

4. Think of Potential Tenants

Are you leasing out your property in the future? Whenever you make a decision, put yourself in their shoes because their expectations and needs are very different from yours. 

Some things to think about are: What type of tenant would want to lease in this location? Will your tenant find success here?

5. Hire Professionals

If you’re looking to purchase commercial property, the best choice you can make is to hire a commercial real estate broker from the onset! He or she will have all the experience and knowledge to help you make the best decisions and meet all your goals.

Conclusion

Commercial real estate is an entirely different beast than its residential sibling. There’s more research to be done and more things to think through depending on your personal goals and the type of property you will be purchasing. Before you start your real estate journey, it’s best to hire professionals to lend you a hand.

Are you looking for the best property management company in Jacksonville? Quest Real Estate makes owning commercial and retail space worry-free. Commercial real estate investing, management, and leasing are made easy due to our market research-based approach. Contact us today to learn more about how we can help!