Buying a piece of commercial real estate is typically a very lengthy and difficult prospect for many people because investing in commercial real estate is often a lot more complicated than simply buying a home. Listed below are three steps to take when considering buying any piece of commercial real estate:
Research The Local Zoning Laws
The most important step that you should always take before purchasing any piece of commercial real estate is to research the local zoning laws. The reason for this is that you may find that a certain location is zoned for commercial or industrial use, but there are limits on the type of activities that you can perform in that neighborhood or area.
For example, you may find that the area is zoned for commercial use but that it is close enough to a residential area that you are limited on the amount of noise that you can produce in that area or what kinds of chemicals your business can utilize that area. This makes doing your due diligence absolutely vital because buying the property and then finding out that there are these restrictions could cost you a lot of money in the long run.
Research Historic Lease Prices In The Area
Additionally, before putting an offer on a piece of commercial real estate research historical lease prices in the area. This is very important because if you're planning on renting out space in your commercial property to various businesses, you need make sure that you are not basing your future profits and business plan on a price that you are not going to be to charge for the space due to the area having lower lease prices over the past few years or decades.
Determine If There Is Any Competition In The Area
Finally, determine if there is any competition in the area before buying a piece of commercial real estate that you are intending to lease out to customers or clients. The reason for this is that if there is a lot of competition in the area, you may find that there is not enough sustained demand to ensure that your commercial property is always full. This could result in you going months or years without having all of your office space or commercial space leased out, which can greatly reduce your potential profits.
Contact a real estate agency like The Schueler Group that specializes in commercial real estate today to discuss what you are hoping to find in a piece of commercial property and what you should do to ensure that you are getting a piece of commercial property that is appropriate for your needs. When buying any piece of commercial real estate, it is important that you research the local zoning laws, research historical lease prices in the area, and determine if there's any competition in the area before settling on the property.