June 29, 2018
Shifting from renting to owning commercial real estate is an exciting step for a business. However, there are several steps to follow before becoming a property owner. It is crucial to follow these tips to ensure your real estate decision allows your company to thrive.
It is helpful to list the benefits and drawbacks of purchasing real estate. Some of the positives to consider are the tax advantages, like the deductions for real estate taxes, utilities, insurance, and other expenses. However, you will be responsible for the cost of maintenance and repairs. It can also reduce the liquidity of your business, as well.
When trying to find the right property for your business, there are numerous aspects that can influence your choice. The most crucial characteristic is location. You want to make sure that the site is in close proximity or at least an acceptable distance to customers, employees, suppliers, and vendors. Retailers will need to have an adequate parking area for customers, while distributors will require a large loading dock. Make sure your company will also comply with the zoning laws and other rules for the property. It is also a good idea to consider the potential for expansion and if the location can accommodate for it.
You should also develop forecasts. Determine the long-term costs associated with owning commercial real estate versus renting. Assess the market to get an idea of what the expenditures would be. An accountant can evaluate the income and expenses of your business to find how much you can afford to spend. Remember to factor in the costs of ownership including taxes and debts, while also including the savings from tax deductions among other things. While on a short-term basis renting can seem more economical, in the long run it can be more beneficial to buy a property instead.
Perform due diligence for the prospective location. This is to ensure that there are no problems that can cause trouble for your business later on. Engineers or other experts can inspect the property to alert you of any potential issues.
The process for ownership is complex, so it is best to surround yourself with experts who can offer some assistance. The number of expertsyou need to consult will depend on the type of property you are interested in purchasing. In the simplest cases, all you should need to hire is an accountant, commercial realtor, commercial real estate lawyer, and a mortgage broker. For more difficult situations, more specialists may be involved including tax experts, environmental specialists, notaries, or appraisers. The information they provide is critical to ensure you are making a sound financial investment, so be sure to rely on the advice of experts.
NAI Isaac offers a comprehensive range of commercial real estate services. Our team has expertise in many facets of the industry which supplies us with the necessary skills to successfully handle any real estate opportunity. We have over 170 years combined experience in real estate, so you can trust that we can lead your business towards long-term success. We are located in Lexington, KY to proudly serve the surrounding area. Call us today.