6 Tips for Buying Commercial Property for the First Time
Commercial real estate development is booming in Florida. If you’re thinking about investing, keep these 6 considerations in mind when you’re looking for property and throughout the buying process
When you’re buying commercial property for the first time, Florida’s a good place to do it. According to a survey from the National Association of Industrial and Office Parks, Florida ranks fifth in the country for commercial real estate development. The state’s commercial real estate projects contributed $20 billion to the economy in 2018 and supported over 161,000 jobs.
The economic stability of the state is strong in general. U.S. News and World Report ranked Florida second in its fiscal stability rankings, and Florida’s job growth rate of 3.0 percent is the fastest rate among the country’s 10 largest states.
Investing in commercial property can be a wise move, especially in a good economy. But before you do, keep these six tips in mind to make sure you make the right decision.
1. Should you build or buy?
Depending on your timeline and budget, you may be weighing the pros and cons of building your own commercial property versus buying. The path you choose depends on factors such as budget, time of year, the current market, location, zoning, and others. You need to figure out if breaking ground on a new property is a must for your specific business needs, considering that problems may arise during the building process that could hike up costs, and fast.
A commercial real estate inspection is an important part of the buying process. You may be set on a property, but the inspection could reveal damage or problems that you just can’t afford to risk.
Inspectors assess a property for any issues and risks and look for code violations. They examine the structure, including the foundation and the roof, HVAC, electrical systems, the exterior, sprinkler systems, and accessibility features.
Some of these violations could be extremely costly to fix, so the inspection gives you all the information you need before moving forward with the purchase. You don’t want to be stuck with a commercial property that has a lot of underlying problems from the start.
Zoning laws and regulations are created by local governments to manage community development, and commercial real estate buyers must know their local regulations and how to comply with them. Zoning regulations indicate which districts within a city can be used for residential, industrial, or commercial properties, and they also regulate the buildings themselves, including how a property impacts its surrounding structures, public spaces, or streets.
Because zoning laws can be complicated, and they vary from city to city, it’s always a good idea to work with a real estate attorney to help you ensure you’re doing everything the right way. Attorneys have lots of experience with these processes.
4. Compare several options
Especially as a first-time buyer, make sure you look at multiple buildings and spaces before making a decision. As with buying a home, it’s easy to get caught up when you find a property you really like, and you may be tempted to lock it down right away.
But looking around ensures that you know more about what other properties are selling for, and you may find an even better deal on a similar property. Create pros and cons lists to compare each building’s features and price. Comparisons will help you figure out exactly what your top priorities are, and what you can do without if necessary.
5. Remember to negotiate
Even if you found the perfect property within your budget, it’s always smart to negotiate as much as you can. Buying a commercial property is a big investment that will continue to cost you long after the purchase, so getting the price down is extremely important and will help your business start off strong in the new space.
6. Work with a real estate attorney
These considerations only touch the surface of everything that will go into buying your first commercial property. That’s why you need help from experienced professionals who know the industry and the local laws and regulations. This will be one of the biggest purchases you ever make, so you don’t want to take any chances for your business.
The team at PeytonBolin is committed to helping you through the purchasing process, and we will make sure you understand all the legal language and requirements that a realtor may not be able to explain. Contact the attorneys at PeytonBolin to get started with your free phone consultation.