If you are ready to buy commercial real estate for your business, you likely have a lot of questions. Is purchasing commercial property the same as buying residential property? What are the differences? Does buying make more sense than leasing? How do you find the right property to meet your business needs? The following tips will help you get the process started.
1. Leasing Versus Buying: Which Option Makes Sense for You?
If you are considering buying commercial property, you may have already ruled out leasing. However, it is essential to really think about the effect of buying instead of leasing. Buying when you have just started a new business may not make sense if you are worried about cash flow and the significant loss of liquidity that comes along with buying a commercial property. What you may think is a hot property now may not be the same in just a few years.
On the other hand, commercial leases are often long-term, which can be just as restricting as buying a property. You also may not be able to alter the property as much as you would like if you do not own it. Maybe it makes sense for you to invest in real estate as a form of equity for your business. Be sure to look at the purchase from every angle before you commit.
2. Location, Location, Location
The location of your commercial property should be a significant consideration. The purpose of the property will dictate what type of site will work best. For example, if you want a warehouse, you may not need it to be right downtown. Instead, ease of access, especially to major roadways, may be high on your priority list. If you want customers to visit, being seen might be your most important factor. Think about what is important to you in your commercial property and then decide what type of location will meet that goal best.
3. Allowable Uses and Limitations
Many properties will only permit you to use it in a certain way. There may be restrictions for the particular area, such as zoning requirements or limitations on what utilities or services may be available. Be sure to check out whether you can do what you want inside this property before you buy.
You should also keep in mind that zoning laws or building codes may restrict how you can use your building as well. Buildings in historic districts, for example, may limit how you can change the exterior of the building.
4. Size and Opportunities
Will this property be big enough to expand if necessary? If it is too big, is there an opportunity to portion part of it off and lease it out? Buying a property that can be flexible will be a good investment in the long run.
5. Getting the Right Attorney is a Must
Having an attorney who has experience with New Jersey commercial real estate is absolutely necessary. Your lawyer will be able to help you through the transaction, including negotiating with your seller and your lender.
The team at Matus Law Group can be a beneficial resource. Contact our experienced and reliable legal team to learn more about how we can help.