Investing in commercial real estate is a daunting proposition to any new investor. The inherent risks of real estate investing make it challenging to identify the most cost-effective solution. If you are a business owner looking to establish a new office or manufacturing location, finding the perfect property can be stressful. Keep in mind a few basics when you begin your search to make an informed decision.
Before you even begin the process of searching for properties, write down a detailed list of your investment goals. Investors looking for an office building with established renters will have different requirements than a business owner considering an additional manufacturing site. This list keeps you focused on the features that you require.
Prepare for Financing
Begin working with your financial department and potential lenders to determine what is the maximum amount you can spend on your property. Knowing your credit score and sharpening your business plan is critical to the next step.
Search the Listings
Now that you know what you want the property to do for you and how much you can afford to pay, you can begin the search for the perfect property. Numerous online tools allow you to filter your search based on those criteria. Consider hiring a commercial real estate professional. They may have information regarding properties that are not yet on the market. All of these resources can give you a list of the top properties that you want to personally view.
Evaluate the Neighborhood
Perform a preliminary request for zoning information on the parcel. It is important to know upfront if the property is zoned for the type of business you have. Most municipalities have strict procedures for changing the zoning classification of a property. Make sure you consider this as a cost of acquiring the property.
Research the Surroundings
Look around the building and see what type of competition is near the property. Consider parking or transportation challenges that your customers or employees may experience. Visit the site at night to ensure adequate lighting is available in and around the building for the protection of your customers, staff and building.
Take detailed notes about these factors and any other comments you may see as you tour your potential commercial real estate investments. This allows you to rank your choices based on the facts about the parcel, allowing you to make the most cost-effective decision.