Your Guide to the Ins and Outs of Commercial Real Estate
How Do I Buy the Space?
If you have enough capital to actually buy a place, that’s great! If you are just starting off your business and can’t afford to buy space, you may need to rent or lease. This can be a little trickier. Lease contracts are complicated, and it is wise to have a lawyer take a look at the contract before you sign. Many inexperienced tenants accept a landlord’s contract without making any changes, and this can be dangerous. You could end up agreeing to a contract that gives the owner of the building too much power over you and your business, or you might even overpay for an inferior space. If you decide to buy, have the building inspected for structural problems so you do not get saddled with any unexpected maintenance costs. You want to be sure you know what you are getting into before you sign.
When Should I Buy/Lease?
If you have, or know you are about to have, products to store or employees who need a workspace, then it is time for you to get a place. You also want to make sure you can afford the property. Capital, from your business or investors, will need to be saved in advance for this purchase. You should also be sure that once you have the space, your business will be making enough money to continue renting. Timing is very important.
Where Should I Buy/Lease?
Location is key. If you are opening a store, restaurant, or any establishment that needs human traffic to make money, you want to be somewhere that gets a lot of pedestrian activity. Downtown city areas are good examples. You should also do some research to make sure there is not another established business similar to yours nearby that will produce competition. Do more research to make sure that your business is in demand wherever you decide to open up shop.
Being informed allows you to make better decisions in your commercial real estate transactions. Knowing what to do and expect is key to being successful in your ventures.