Top Mistakes Business Owners Should Avoid When Buying Commercial Property
Purchasing commercial premises can be a long process requiring due diligence and plenty of research, in order to make the right decisions. You don’t want your investment to turn sour further down the line, so taking the time early on to avoid any mistakes is crucial. Here are some common mistakes you need to avoid when buying commercial property to ensure that your investment remains positive.
Ignoring the property market
Many commercial property investors don’t consider the larger market picture when they’re making decisions. There will always be a reason why a property is marketed at the price it is, so you need to consider the surrounding trends to understand what’s influencing the price. Culture, politics and more can impact the property market. Ignoring such factors could cost you in the long term when choosing the type of commercial property you’re buying.
Neglecting a building survey
Preparing to buy a commercial property is simultaneously a short and long-term process, so you need as much information as possible before making a choice that suits your plans and budget. Investing in a commercial building survey is an effective way to do this, providing you with the information you need to plan ahead for any repairs or renovations that will be required. To avoid any potential liabilities, a surveyor will advise on such areas as neighbourly matters, dilapidation obligations, structural integrity of the building and configuration, statutory compliance and the energy performance of the building. Avoiding this critical step could easily set yourself up for failure further down the road, when faced with time-consuming and potentially costly repairs.
Not calculating expenses
Ongoing expenses can dramatically impact the success of your investment and can be devastating to your budget. These expenses can encapsulate everything from renovations and repairs to energy and parking costs, legal fees, and cleaning services for the premises. While many of these costs will be highlighted by your surveyor, it’s also important that business owners factor in the potential for further expenses, and budget accordingly.
Ignoring the needs of tenants
If you’re investing in a commercial property to rent out, such as a retail space or offices, you need to consider the needs of your potential tenants or clients. What will their intentions be for the space - will they need parking or transport connections? If they’re running a retail business, will they need warehousing floor space? Ignoring their needs could leave you struggling to find tenants to fill the space. This is an important element to consider beforehand, to safeguard a return on your investment. Even better, consider flexible spaces that enable you to adapt to evolving markets with ease.
In summary
It pays to use careful judgment, undertake plenty of research and rely on the knowledge of skilled professionals to back up your investment decisions. While it can be complex, avoiding these common mistakes can help minimise the risk of costly problems and stress in the future.