The price of a commercial property is important, but there are other considerations that you need to make. A solid evaluation will help you determine what type of property is right for your investment and whether or not you are ready to take on the challenge of being an owner. If you are planning to invest in commercial real estate in the near future, here are some questions to ask of yourself and your broker.
Is a Partially Completed or Completed Property Right?
Financial difficulties can lead some investors to abandon their buildings while they are still in the construction phase. Although this is a bad situation for them, this could be a lucky break for you. You might be able to negotiate a lower price than you expected to pay due to the fact you have to contract to have the building completed.
Buying a partially completed building comes with its challenges though. For instance, you will need to find a builder who can finish the building and complete it with the specifications that you want. This task might sound simple, but it can sometimes be challenging and time-consuming.
By contrast, buying a building that is completed and in good condition will give you the chance to start looking for tenants right away. However, if the building is in need of repair, you will still need to work with a contractor before you can make any moves with the building.
Will You Assume Any Debts or Lawsuits With the Building?
When you buy a home, a title search is conducted to determine if there are any hidden legal issues with the home that you should be aware of before making a decision. With a commercial real estate property, the same thing needs to occur.
If you fail to properly research a property, you could inadvertently take on the previous owner's debts, lawsuits, and other liabilities. For instance, if the previous owner was being sued for an accident on the premises, you could potentially be responsible for settling the debt.
Talk to your broker about steps you can take to remedy any legal problems with the property before finalizing the purchase. For instance, the broker could negotiate with the previous owner to settle any outstanding legal issues before you assume ownership of the property.
Your commercial property broker will help you identify other questions you should consider before you settle on a property to buy.Share