Investors buy commercial property as an investment, to sell it to another investor or business at a profit, or to lease out spaces in the property to businesses. Companies also buy commercial properties themselves when they are planning to open an office or plant. Commercial property typically has a separate zoning standard from residential areas and may come under different regulations. If you are interested in buying commercial property, you should keep several things in mind.
How Long has the Property Been for Sale?
Remember that commercial properties tend to stay on the market longer than residential homes. Judge the times by average sales in your area. Typical timeframes in a good market average around a year for commercial properties. If the property you are looking at has been on the market longer than this, a problem may exist that you do not know about. This is especially true if you are buying properties outside of your area.
What Regulations Pertain to the Property?
Different cities and states have different zoning regulations and other standards for commercial properties. Learn the regulations for the area the property is in and if there are any use limitations or restrictions to you selling it or leasing out office space. If you cannot lease the property or must hold onto it for a certain period of time before selling again, this can hurt your long-term plans.
What is the Commercial Market for This Property?
Check the market for your type of property. What prices have similar properties been selling for in the past year? This is extremely important research that can help you find out how well your commercial property will appreciate in value and how much money you can earn in profit. Also, if the prices for certain commercial properties nearby are lower or higher, this will lead you to important information about the property in which you are interested.
What Condition is the Property In?
Never buy a property without inspecting it. This does not mean you actually have to show up at the property yourself, but you should at least conduct a thorough property inspection through an organization you trust. Like residential homes, commercial properties can have hidden flaws or signs of wear and tear that may indicate serious problems you should be aware of.