Because of the volatility of the housing and property market, business owners and corporate executives often struggle with the question of whether they should rent or own commercial real estate. Although both options have their merits, purchasing a corporate property can be a great investment.
Because it can be a complex, stressful, and time-consuming undertaking, there is no one-size-fits-all strategy for purchasing a corporate property. Businesses must do all their homework, performing a careful evaluation and consider a wide variety of factors when deciding whether or not to purchase commercial real estate.
The first thing a business owner should do is assemble a team of experts to advise him or her throughout the process. This generally includes an accountant, an attorney, a commercial broker, and a mortgage broker.
The commercial broker will be helpful when identifying potential properties to purchase. The accountant can help the business owner figure out which properties he or she can afford to purchase, as well as analyze the tax benefits and figure out the operating budget. The attorney can negotiate with the seller and lender on the business owner’s behalf, and can also scrutinize the contracts to make sure the deal is fair. The mortgage broker will be a big help in securing financing.
After assembling the team of experts, the business owner will need to find a property to purchase. There are many factors to consider, including location, price, physical condition, potential uses, access to parking, limitations, and opportunity for expansion.
Location is probably the most crucial factor, because it’s important to be close to customers and vendors to maximize convenience. Depending on the type of business, being close to major highways may be important as well.
Business owners should also have thorough inspections performed on any properties they’re thinking of purchasing. They should evaluate any potential liability issues, such as asbestos, lead-based paint, or other environmental hazards that could create a hazardous work environment. Additionally, they should bringing in other experts, such as appraisers and engineers, to verify the condition of the property, identify any structural problems that will need to be repaired, make sure that the property is up to code, and confirm that the property is not involved in any existing lawsuits or insurance claims.