Expanding your business through commercial property acquisition is typically one of the safest investments a business can make. Not only will it earn you positive returns every month, but, considering the current real estate climate, you can also expect the property to appreciate in value over time. Before jumping in with both feet, however, it is beneficial to know the fundamentals of commercial property investment. Here is what you need to know to get started.
Choose the Right Premises
Depending on the kind of business you run, different types of premises will be better suited to your needs. For instance, if you’re shopping in the industrial sector, you’ll likely need government permission before you can start operating your business. Similarly, if you’re looking to buy office space, think about how much room you will need per employee as well as if you’ll need additional space for meeting rooms or places to conduct interviews. It’s generally a good idea to limit your search to modern buildings that already have in-depth security systems built in, as redeveloping properties can be time-consuming.
Find Ideal Property
Once you’ve created detailed search criteria, it’s time to start researching what’s currently available on the market. There are a number of ways you can do this: you can try looking through industry journals, speaking with local real estate agents, or searching online. If you have little experience dealing in this market, it’s highly recommended that you seek consultancy from a specialist. GVA Worldwide can offer you an independent valuation of a property as well as advice on how to take the project forward. For such a major purchase, this kind of service can be invaluable.
Finance Purchasing Decision
The final step will be deciding how you will finance your purchase. Unless you have access to large amount of discretionary cash, the most likely financing option available to you is taking out a commercial mortgage. This typically requires commitment of around 15 years as well as substantial deposit, usually between 20-30%. While this may be a significant cost early on, you’ll benefit in the long-term as you won’t have to worry about rental increases. You may be able to structure the deal over fixed monthly payments to give yourself security over your outgoings
While investing in commercial property is often a sound investment strategy, it is not without problems. Before you commit to any kind of deal, you should always make sure that you’re aware of all the facts.
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