4 Things to Consider When Shopping for Commercial Properties
Whether you are new to real estate investing or have been in the business for years, commercial properties can offer a stable income and numerous expansion opportunities. Here are four things you should consider before deciding to purchase any commercial property.
There are multiple factors that come into play regarding the location of a commercial property. You want to consider the surrounding neighborhood, type of properties nearby, and other building projects that have been proposed or started.
Traffic is another aspect of the location. You want a consistent flow of vehicles going past a commercial or retail building. If you are looking at apartments or rental properties, however, a quieter street with easy access to major roads might be more attractive to potential tenants.
2. Building Zoning
What type of use is the property or building zoned for? There are many different residential, commercial, and industrial zoning levels, so be sure the property aligns with what uses you have planned for it. In some cases, it may be worth appealing the zoning to have it changed.
Check the overall condition of the building and grounds. Are utilities up to code or are there any structural concerns that you need to know about? As long as the structure is sound, don’t be discouraged by dated decor or inefficient designs. Successful redevelopers like Los Angeles based Steven Taylor have found success in buying buildings in need of cosmetic updates and bringing them up to date.
4. Number of Units
If you are looking at multi-family housing or retail spaces, decide upfront how many tenants you can realistically manage. Being a landlord is a lot of work, so be prepared for what you are getting yourself into.
Investing in commercial real estate can be a profitable and rewarding decision. Following some basic advice can help you remember the important things to consider when looking at properties, and may help you avoid the pitfalls of getting in over your head.