As of 2023, the United States commercial real estate market has an estimated value of over $1 trillion. Experts forecast that to grow further by 3.5% throughout 2028.
One reason for that growth is that many businesses now wish to own property instead of renting it. So if you’re part of this group, now is the time to learn how to purchase commercial property.
Below, we’ll tell you what you need to know about the commercial property buying process, so read on.
Determine the Property Type Your Company Needs
There are five different types of commercial property you can purchase. These include hospitality, industrial, multifamily, office, and retail. Your choice should depend on and revolve around your company’s requirements.
Suppose you own and operate a service-type business, such as I.T., accounting, or marketing. In that case, you should look into purchasing an office building. But if you manufacture products, you need an industrial real estate property.
Secure Financing as Early as Possible
Once you’ve determined the type of property you need to buy, the next step is to know how much you can afford. And unless you’re a multi-millionaire, you likely need aid from a lending institution.
You’d want to secure financing early, even before comparing property costs. That way, you’ll know how much you can borrow and, thus, afford to spend on a property.
Avoid High-Risk Properties
High-risk properties are buildings and land exposed to dangers like cyclones and floods. You must avoid such because hurricanes alone cost the U.S. an average of over $20 billion per event. Floods also cost the nation $4.8 billion in damages per event.
Aside from natural disasters, you must also learn about a property’s site boundaries. These include possible encroachments, which an ALTA land survey can help you determine. By knowing these factors, you can avoid penalties and even litigation.
Find the Perfect Property With Professional Help
Hire a commercial real estate agent specializing in the type of property you wish to buy. You should also consider working with a commercial real estate attorney and accountant. They can assist with the smooth and legal purchase of the property from start to finish.
For instance, a real estate agent can help you find a property in a suitable location for your business. They can also assist with the inspection and the final negotiations for the property.
A real estate lawyer can also help by working with your agent regarding legal matters. These include zoning, development, titling, and title insurance, to name a few.
Make an Offer and Close the Deal
Once you find your dream property, have your agent and lawyer finalize the purchase. This includes making an offer with an inspection contingency clause in writing. That way, you won’t be legally obligated to buy the property if it fails the inspection.
If the property passes the test and you want to invest in it, it’s time to close the deal.
That’s How to Purchase Commercial Property
Now that you know how to purchase commercial property, it’s time to build your team of experts. The sooner you do, the sooner they can look for prospects, inspect them, and negotiate prices. That can then help you close the perfect deal and open the doors of your new commercial space to the public ASAP.
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