4 Tips To Consider When Buying or Building Commercial Property
While online businesses have taken the world by storm in the past few years, there is still definitely a growing demand for commercial property.
Not every business can be run completely online, and many businesses require retail stores, warehouses, offices, manufacturing buildings, and other physical spaces to get the work done.
As your business grows and becomes more complicated, your need for commercial property will grow alongside it. But investing in property of any kind is just that, an investment.
Every investment has a degree of risk involved, but you can minimize this risk and maximize the benefits of your new procurement by taking time to think and consider how it will impact your business.
With this in mind, here are some things you must consider before you buy or build a new commercial property.
1. Consider The Needs of Your Company
Before you even make the first steps towards buying or building property, you should define exactly what your company needs.
In a way, this is a bit like hiring an employee. When you take on an employee, you first need to define the role that the applicant needs to perform.
This will allow you to pick the right person for the job, as well as to determine a fair wage. If you skip this step, you practically guarantee that the employee either won’t be able to fulfil their tasks or that they are overqualified for the work and their skills go to waste.
2. Consider the type of property
When you’re looking for commercial properties, you need to be aware that not every building is created equal.
Different needs will dictate the best property for your company. For example, if you need a warehouse to store materials and smooth out your production line, you need to consider size and location.
It isn’t necessarily a good idea to put a warehouse in a prime real estate location because you will have to deal with high costs. However, it’s also a bad idea to stick it in the middle of nowhere where it’s inaccessible to either your retail outlet or your manufacturing plant.
It should be somewhere convenient for whichever location will get the most use out of it.
The same things apply to an office building. Ideally, it should be somewhere convenient for employees and clients alike. A huge office building would be inappropriate for a small business with just a few staff members, and it would be an unnecessary drain on resources.
If you work out the size you need, as well as the function of your new commercial property, you can find a suitable location for your needs.
3. Set a Budget
Part of planning to grow your commercial property involves, unfortunately, paying for it.
Cash flow is a vital part of any healthy business and, while spending as little money as possible is a good goal, a better goal is to spend an appropriate amount of money that suits your needs and resources.
Again, we go back to what you need out of your commercial property.
These needs should be balanced with budget. The cheapest option isn’t always the best option, and often it’s more financially intelligent to spend more for a property that fits the needs of your business.
For example, a commercial property in the middle of a wasteland is going to be cheaper than a property in a town centre. But if you’re selling something to the public and you rely on people walking past your retail store or restaurant, you are sacrificing a huge amount of profit potential.
So, your budget should include what you need and what you can sacrifice to meet those needs. On the other hand, it should be reasonable and realistic.
There are surefire ways to overcome financial problems in your business. So, bankrupting your business and going into massive debt for the perfect property can cripple your business, even if it seems to boost your sales for a while. That debt needs to be repaid.
4. Decide Whether to Buy, Rent, or Build.
The next question to tackle is whether it’s best to buy, rent, or build a new property. Let’s break these options down.
The most achievable option for most businesses is to rent a property. When renting, you have lower up-front costs and you don’t need to worry about doing a lot of work before you can start trading. Some properties just need a quick round of decorations to make it look like your business, then you’re ready to make the move.
However, renting a property means relinquishing some of the control over the property. You have to pay rent, which can involve high rates, and you aren’t able to fully put your mark on the property. Yes, the landlord is also responsible for maintaining the property, but this can be a double-edged sword.
Another option is to buy a property. This is probably the most expensive cost upfront, but it allows you to have full control over your property, including the ability to renovate it to your needs when desired.
When buying commercial property of any kind, use a commercial property solicitor and realtor to make sure the purchase goes as smoothly as possible. Similar to when buying a residential property, it’s important to get the building checked out and surveyed before you buy as well. This does raise the costs, but it’s worth it to avoid any painful surprises.
Finally, you have the option of building a property from scratch. This still involves purchasing a plot of land and making sure you have planning permission, and it can be a great deal of work. However, you have full control over the design of the building, allowing you to perfectly match it to your needs.
5. Use Skilled Contractors
Whether you’re building or renovating commercial buildings, you must use skilled contractors that you can trust. The building site should be safe and efficient.
If you use poorly trained contractors, you might save some money in the short term, but the result could be incredibly expensive. For example, if the building site itself is unsafe, it can cause delays and your company may be liable for damages or injuries.
Not only this, but a shoddy job reflects on your business even more than the contractors themselves. Your commercial property isn’t your primary marketing method, but it does impact how people feel about your company, whether that’s fair or not.
By using a trustworthy contractor, you enormously decrease the risk involved in a major building project. But how do you know who to trust?
One good way is to use someone with a good reputation. Reviews from other clients and especially from other businesses with similar needs to your company are a good place to start. You should also pay attention to their commercial contractor glossary, as this will give examples of past projects and highlight the experience of the contractor.
The contractors should be willing to discuss your concerns and work through them with you. If they simply offer you an extremely low price and leave it there, you should be careful as this is a sign that they are not trustworthy or don’t understand the project.
Conclusion
As a business owner, you need to ensure that your company is above reproach in every way. A good commercial property can be an asset to your business for years to come, so ensure that you look after it and procure the best property for your needs and those of your employees, customers, and clients.
