A commercial building can be an attractive investment for anyone who wants long-term returns. As a general rule, commercial tenants tend to stay in their locations for several years at a time. Therefore, you don’t have to worry about vacancies or not collecting rent checks on a regular basis. However, there are issues to consider when selecting the commercial property that meets your needs.
Is the Building Currently Occupied?
Just like you want to buy a house that has paying tenants, buying a commercial building that is already occupied is ideal. This is because you will start earning a return on your investment immediately. It may also be possible to renegotiate the terms of the lease if you think that you can get more money.
In many cases, corporate tenants can justify paying more per month, and this may be especially true if they were paying a below-market rate in their current lease. Landlords who are looking for commercial tenants may benefit from visiting sites such as http://sfofficespaces.com/industries/commercial-office-space/.
Is Your Tenant a Major Corporation?
The only thing better than having a commercial tenant is having a tenant that has a track record of making money. This is because companies tend not to stray from areas where they make a profit on a regular basis. Furthermore, a company is going to want to make sure that the space is properly cared for. Ultimately, you can be sure that you will collect a rent check while also spending little to no time or money on maintenance.
Is the Property Zoned Correctly?
If your commercial building exists in an area that is zoned residential, it may not be possible to have a commercial tenant there. While it may be possible to attract residential tenants, that may not be lucrative enough of a return on your capital. In the event that you buy the building anyway, it is possible to convince the local government to change the zoning laws or otherwise make an exception for you. However, this could take time and money that may be difficult or impossible to recover in the future.
Will the Property Appreciate Over Time?
When buying a commercial property, you want to be sure that it will appreciate in value over time. This is generally easier to do when there is demand for land or other space in a given area. Buildings may also appreciate in value if they are in areas that are attracting new businesses. These companies will need office or retail space to find clients or close on sales. As their demand for space increases, the amount that people will pay to buy them will also increase.
If you are looking to buy office space, it is critical to not take the first building that becomes available. Make sure that you are taking steps to evaluate its potential to make money both today and into the future. It is also important to know that you can work with any tenants that building already has.