Did you know that there are an estimated 5.9 million commercial properties in the United States? If your business needs to expand or move to new premises, there’s often plenty of choice of existing units you could buy.
But the decision-making process involved in commercial property buying is a complex one. Mistakes made at this stage could cost your business dramatically later on.
So, when investing in commercial property, what are the things you need to be aware of?
In this article, we’ll talk you through some of the most common mistakes businesses make when buying commercial property so you can make a wise decision.
Not Setting a Proper Budget
It’s vital that you have a fully-considered budget when making a commercial property investment. Your budget shouldn’t just include the purchase cost for the premises, it needs to factor in:
- Any repairs needed to bring the building up to spec
- Any furniture and equipment needed for the new premises
- Removal costs
- Any downtime or disruption in your trading caused by the move
- Agent fees
- Attorney costs
- Service and utility costs
By ignoring all of these additional costs, you may end up going over budget and putting your business at risk.
Doing Everything Yourself
Thankfully, there are experts in managing commercial property purchases. There are legal processes involved that a specialist agent will understand. Use an agent to relieve the stress and uncertainty surrounding the transaction.
Not Getting an Inspection
When buying a property, you need a commercial inspection. This will tell you about any structural issues you’ll need to address if you continue with the purchase. Investing in an inspection could stop you from buying a property that could cost your business dearly.
Not Doing Due Diligence On the Area
If you’re setting up your business in a new area, you should do some research.
Ask the following:
- What other businesses are nearby?
- What are transportation links like?
- Is the location easy to access?
- Is there employee and customer parking available?
- Are there void units nearby?
- What kind of investment has the local government put into the area?
- Is there scope for extending or developing the plot should the needs of your business require?
The more due diligence you carry out, the more chance your property will be right for your business.
Choosing a Property That’s Not Fit for Purpose
Commercial properties have different use classifications. Is the property you’re buying suited to the type of business you operate? Suitability may not be the only issue. There may be legal restrictions on certain types of business operating from the building you’re buying.
Avoiding Commercial Property Buying Mistakes
Commercial property buying mistakes could seriously damage or even spell the end for your business. Making the right, informed choices is vital. Always seek professional advice from agents and property inspectors before making an investment.
For more advice to benefit your company, check out the business section today.