Real estate or property is a valuable investment option for business houses. According to economic research, property is the best way to create wealth. Being in a position to buy commercial property is an exciting phase for a business as this creates new possibilities. By purchasing property for a business premise, business owners can save up to 50% on premises costs over a 10 year period, without compromising the business cash resources. Below however are some mistakes you must avoid when buying commercial property.
Not doing your research – One of the biggest mistakes you must avoid is not doing your research whether the property is zoned for commercial use or investigating any potential town planning restrictions for the chosen area. Doing this research helps you to know whether your business could face growth restrictions in future.
Not considering the business growth potential – It is not advisable to buy property to only sell a few years later because you could potentially lose money and sourcing new property comes with additional costs such as agents commission and transfer costs.
Not checking if the location is convenient – Accessibility is about employees and clients. If this factor is not well checked, you could end up investing more resources in transport or losing talent due to the inconvenience of the business location.
Not accurately determining the property’s value -The objective of every property seller is to make substantial profit from the sale of their property.This is why commercial property buyers need to understand and research the potential value of their targeted property and negotiate a reasonable price.
Not understanding upfront and ongoing costs – Similar to buying residential property, there are upfront costs that need to be settled by the buyer during a commercial property transaction.These include transfer or registration costs and these largely depend on the sales price.
While the list is not conclusive, the points above should be highly noted.