As a small business owner, you have probably considered the benefits of owning your own space. Purchasing commercial real estate can be a wise business decision. In addition to being a long term investment opportunity, property ownership can also result in favorable tax benefits.
Owning your property creates more stability. You are not under the control of a landlord who may raise the rent or not renew the contract at the end of the lease term. As an owner, you also have the freedom to renovate and upgrade the space as you see fit.
Purchasing commercial real estate shows your customers that you are here to stay while supporting the local community.
While there’s not a one-size-fits-all approach to buying real estate, all small business owners should consider these 6 things to make the process smoother.
Know What You Can Afford
If you’ve ever bought a house, you know it’s best to start the process knowing what you can afford. The same goes for purchasing commercial real estate. You don’t want to find the “perfect” location only realize it’s not affordable and have to start the process over.
Work with your loan officer to determine what size loan payment your business can comfortably support. Discuss the different loan types and terms that are available for your business.
Find the Right Location
As a small business owner, you know the importance of being in the right location. Wilmington and the surrounding counties provide potential buyers with a variety of options from retail to industrial.
Do you need to be close to your customers? If you currently have a storefront, how far can you move and still retain your current client base?
Do you need easy access to the highway or port? Does the zoning allow for your type of business?
How is the visibility and access from the road? Is there sufficient parking?
All of these questions and more will help you find a location that fits your current needs and will help you continue to grow your business. Your real estate agent can help you examine the property and your business needs to determine if it’s a good fit.
Buy or Build
Once you decide you’re ready to own property, you have to decide if you are going to buy an existing building or purchase land for new construction. There are several factors that go into making this decision. Many business owners like the idea of new construction because you can fully customize the building; however, your location options may be limited.
Talk to your real estate agent about your needs, your wishlist and what’s available in your desired area.
If you decide to purchase an existing building, have an inspection done to find about potential issues. If you plan to renovate, be sure to check for any building codes that could impact your plans.
When purchasing land for new construction, you will need to check on zoning and city ordinances. Be sure to discuss the financing options for a construction loan with your banker.
Future Growth Plans
Purchasing property is a big step in the life of your business and for you as a small business owner. You are putting your stake in the ground and showing your community you are here to stay. Before you sign the final papers, be sure the space fits your current budget AND your plans for future growth. You do not want to purchase a property only to have to move because it cannot accommodate your growing business.
Purchasing commercial real estate can be a wise investment in your business and your future. With these four tips, you can be more prepared to take those next steps in talking to your financial advisor, real estate agent, and business team.