Purchasing commercial property is a rather complex business that makes it challenging for investors to maximize their value of investment. Help is however available from real estate sources online such as http://macarthur.ljhcommercial.com.au/commercial-with-lj-hooker. As well, the guide below can help you reach a realistic decision if faced with this purchasing choice.
Deciding between Purchasing and Leasing Commercial Property
One needs to appreciate the risk involved in either buying or leasing commercial property by considering the risk this action involves:
1. Location may backfire
Commercial properties situated within trendy locations normally have a high possibility of depreciating in value with time. A particular place might not appear trendy at first but lose its business appeal as time progresses. Still, the market for such property can suddenly exhibit a decline and render a particular region undesirable for business objectives.
2. Loss of liquidity
It is oftentimes an uneasy thing selling off property. A business entity which owns some piece of real estate might want to dispose of its property as a way of obtaining cash for investment purposes.
3. Tenuous cash flow
The cash flow of a business enterprise that owns rental property can be compromised severely if tenants stop paying rent for instance whilst the property requires unexpected and costly repairs. Individuals can visit http://macarthur.ljhcommercial.com.au/commercial-with-lj-hooker and find good suggestions of properties in location to business prospects.
Assembling a Team of Professionals
Not all people are experts in handling matters of commercial real estate. As such, one should endeavor connecting with seasoned experts within the industry before making such decisions. These real estate practitioners can come in handy in determining the most appropriate locations and best time for purchase and sale of property, among other points. A couple of professionals can constitute such a team as follows:
- Accountant for assisting in performing analysis of tax dues and operating benefits as well as determining what is affordable
- Lawyer for negotiating with lender and seller in your place and helping to complete the transaction
- Commercial broker to aid in identifying potential properties which are affordable
- Mortgage broker who can sort out all funding aspects of the property
Identifying the Right Piece of Real Estate
One needs to consider a number of factors before purchasing any kind of property, including:
- Location – This matters appreciably since it should be at a convenient place for vendors, workers, suppliers and even customers. It is crucial to keep in mind your type of business while deciding on what property to acquire. Another important matter to consider is how accessible a given location is to infrastructure such as highway, rail lines as well as shipping lanes.
- Physical Condition – The physical state of the location where some piece of property is needs to be considered carefully too. One should assess any presence of wear and tear and environmental issues among other potential liabilities that could arise after the purchase is made.
- Allowable Uses – Seek to acquire the kind of building which suits your business-niche well. Industrial space would for instance suit a manufacturing business very well and office space, accounting firms.
The real estate industry every few years suffers from a setback that leaves the small and medium-sized business in a dilemma. This affects the decision of whether to own or rent commercial property. However, logging onto websites like http://macarthur.ljhcommercial.com.au/commercial-with-lj-hooker can assist potential investors in reaching refined decisions in this case.