Every businessman finds himself looking for commercial property at least once in his professional career. You need a good workspace to operate your business. Some need a place where they can attract their customers, some need to hire employees, and some need to do both.
Either way, commercial property is found in different locations than residential areas and they are usually much more expensive. You will probably also need a bigger place than a house. Considering the size and price, you will have to be very careful with this transaction.
One little mistake could cost the income of one year of an employee. This is why you should do your homework to prepare for it. Here I’ve discussed a few basic things you should know before buying a commercial property.
Make Sure Buying is the Right Choice
Commercial property is very expensive. You should think twice before you even decide on purchasing it. Make sure that buying is the right choice and not renting it. Many businessmen think that you should not reserve so much of your money into just one place that takes time to liquidate.
Instead of spending hundreds of thousands or millions of dollars in one place, you can spend that place somewhere more important. You can invest it and make more money from it. This is not going to be very difficult. In fact, it’s safer and easier to rent the property.
A rental is also going to get you all the services and facilities you would get by buying the property. In fact, commercial properties are rented for a specific purpose. This means you can get an already furnished building with the facilities that your business requires. Once you buy the property, you won’t be able to use that money. On the other hand, you only pay a very small portion of the real price as monthly payments. If you are 100% sure that buying the property is the right choice, only then should you move forward.
Even if you are buying, try not to buy it on full payment unless it’s an unbelievably good deal. Pay the advance and divide the price on installments of a few years. This way, it will be like paying the rent, but you will get to own the property after a few years. You will still have your full payment at your disposal to invest somewhere else if you desire.
Visit Property Auctions
Property auctions are a great place to find good deals. Many properties are put in the auction when the owner is in debt or has no other choice. They sell the property even if the bid is low. You should see commercial property auctions to check if you can find something that is useful for you and is being offered at a very reasonable price.
Many businesses end up here when they go bankrupt. Most startups do fail within their five years, which means there will be plenty of options. Many of them offer a fully furnished office with every facility and service your business could need. You should look for companies similar to your niche. They would have built an office according to the needs of your business.
Think of Your Future Team’s Size
You might not have many people currently working with you. Don’t just look for a property to adjust them. Think about your future plans and get a property accordingly. Your business is going to scale and you have to be prepared for it. Otherwise, you will have to look for another property again.
Consider the complete needs of your business and future plans but don’t be unrealistic. You should create a business plan and follow it. If you have done your homework right, you would have set realistic milestones that your business should achieve within the given timeframe.
If everything goes according to the plan and you see your business scaling then getting a bigger property would be the smart decision. On the other hand, you should also know if the business is likely to reduce after some time. You might outsource some of your operations or lay off divisions. Whatever the case, the goal is to avoid buying another property and moving the entire company.
Location is Important for Commercial Property
As a businessman, you would know that the location of a commercial property has significance. If you want to attract a skilled workforce, you should look for an office at a location where it’s easier for them to visit. It should be in a place that appears professional.
If they see flats next to your office, it is not going to present a very good image. Skilled people see more than just salary. If you fail to attract the right workforce, you won’t be able to scale your business.
If you are running a store-like business that is frequently visited by customers, it should be in a marketplace. Try to look for a market that is popular for your niche of business. If there are other similar businesses around you, it is a good thing for you.
Some businesses won’t get frequent customers but will be visited by clients, they need a place that makes you appear very successful. For example, if you have a consultation agency, there won’t be many employees, but you will get clients who will be judging you.
Renovation is Also Going to be Expensive
If you can find a property with all the facilities required for your business, you should prioritize it. However, it is unlikely that you will find such a place. In which case, you will have to renovate the entire place.
Renovation is not cheap. It costs almost as much as the construction of the property. You will have to create a setup that fulfills your business needs. For example, you might have to build cubicles and install a network of wires if you are running a company with many employees. Likewise, be prepared for other expenses such as paint, new furniture, and partitioning.