Finding a commercial property can be a daunting task. As a businessman, there are many options when it comes to choosing commercial property. The primary factor to consider is the size of your business. The size of your business will determine the size of space you need. You may choose to rent the entire floor of a building, a co-working space, or purchase a property that satisfies your needs. We got you covered with factors to consider when choosing a property.
Separate your property portfolio with your operational businesses
Have a company that is running your operational business and another one which owns the property. This secret will enable you to enjoy tax benefits. The trick keeps the two companies as different entities. This means that if at all the business owner decides to sell his operational business, the business will remain on the premises even after the acquisition.
As an entrepreneur, you will continue to earn rental income from a business that you have already sold. Besides, if your business grows, you can acquire another property through the property company’s name. Basically, this will allow you to relocate your business and lease the former building.
Have an objective view of the property you intend to purchase
According to real estate gurus, a large number of people want to acquire business premises because they want to end recurrent expenditures on rent. This is termed as an emotional motive. Purchasing a property based on emotions rather than financial incentives is a blunder. Rush and misinformed motives may land you on the wrong property, which will not satisfy your business needs. Consider the merits and demerits of the property you intend to purchase.
Company management should evaluate whether the company is mature to invest capital on premises rather than investing in its line of specialization. Also, have a close look at the nature of business you carry out. Some companies have specific requirements that call for an owned property while others do not.
Research extensively about the property you intend to purchase
This is the best tip to businesses that want to buy a commercial property. Many property buyers make hasty decisions. A serious and diligent property buyer should use the services of property valuers. There is too much you will hear in public, but professionals have loads of information for you. Valuers help us to get in-depth information about the property. You will know more about:
• Suburb trends
• National trends
• Macro-economic factors
• The area
• Average vacancy rates
• Capitalization rate
• Price per square meter
Determine the right time to buy
The level of responsibility shifts when you purchase a property in contrast to renting. The degree of risk increases, and more costs are incurred e.g., maintenance cost, taxes, rates, security, and insurance, to mention a few. You should take multiple factors into account before buying a property. You should be aware that you are submerging your business into a long-term commitment. This will require you to formulate a five to ten years plan. If you are still nurturing your business, it might be better to rent until your business gets financial muscles to buy a more significant property.
Various factors affect the purchase of a property. Paying keen attention to all the factors will lead to high returns. Make the right choice after consulting a property consultant.