It's a huge step to buy a commercial building, and one that shouldn't be taken lightly. However, even with the very best of intentions, it's still possible to overlook key details when purchasing commercial real estate, and not doing the right research before putting your money down can lead to all sorts of problems down the track, ranging from not being able to secure the right tenants through to legal issues with zoning.
To make sure this doesn't happen to you, we've put together a handy list of three essential factors to consider before committing to a commercial property purchase.
Location, location, location! It may be a cliche of the real estate world, but that's for good reason, and not just for residential property. In fact, the right location is perhaps more important with commercial or industrial buildings, as there's a narrower set of potential tenants that you'll need to appeal to.
One example of location's importance is easy connectivity to road or rail for any import or export needs. If you invest in a commercial property that's too far from major transport routes, you'll need to be aware that could limit the building's appeal to companies in a variety of sectors, including manufacturing.
Similarly, you'll want to consider the economic conditions associated with the type of commercial property that you're looking at. One of the best ways to do this is by looking at the performance of similar companies in the same area.
If you've noticed a high turnover in businesses – and we've all seen those retail or restaurant properties that seem to have a new tenant every six months – then that's a pretty good sign that the economic conditions in a particular sector aren't quite right, and that you should look elsewhere.
Finally, there's the future. Investing in any form of commercial real estate is all about managing demand, and ensuring that your property will be able to meet that demand, not just now, but for decades to come.
To ensure this, you'll want to know as much as you can about the future of the area. For example, if there's a new public transport station under development, that's a pretty good sign that the area is going to grow and attract more people. The same applies to any large infrastructure projects, which typically result in increased demand for nearby commercial property.
Of course, all of this information can be difficult to get your hands on, which is why it's important to work with the experts. Get in touch with Ray White Commercial Gold Coast to make sure your commercial property choice is the right one.