In the past few years, interest rates have been at the lowest level in years. It's definitely led many companies to wonder if maybe it's time to do away with their expensive commercially leased properties and perhaps buy their own space themselves. If you're considering ownership of your own commercial real estate property, then you'll want to take into consideration a number of factors before you sign on the dotted line.
You've heard it before. Important when buying real estate is location. It's just as important when you're buying commercial real estate as it is when you're buying a residential property.
Costs and other factors may make it where buying in the same area where you've long operated your business is not possible. At the same time, moving operations too far out of an area where your company's been housed may make it difficult to maintain your clientele.
When choosing a location for the property you're considering purchasing, consider how the move into the new area is going to impact the tax rate you're assessed. Also consider whether the neighborhood or clientele in the immediate vicinity where you're planning to set up shop are going to be receptive to your products or services.
You'll also want to think about the future sale of the property and whether you believe you could recover your investment if you try to sell your building on down the line.
One positive associated with buying your own commercial property is that it can help stabilize how much you spend each month on overhead.
It's important to keep in mind, though, that commercial landlords may increase rents when occupancy is high for them. This may inconveniently come at a time when your business is experiencing a downturn. This could put you in a precarious situation of trying to keep the business afloat while also being beat down by high rent.
In owning a commercial property, there are some inherent added responsibilities that come with the territory. It places you on the hook for having repairs or maintenance performed on the property, for paying taxes and insurance on it, for providing parking and collecting rent that is owed.
Whether you're just initially looking into making a purchase or you're found one you're ready to buy, a Melbourne, Florida, commercial property closing attorney can advise you as to what's involved in doing that.
Source: The Balance, "Should Your Business Lease or Purchase Commercial Space?," Susan Ward, accessed Nov. 29, 2017