Commercial real estate can be a great investment. However, it is not without its risks. Too often, when purchasing a commercial property, people make mistakes that risk the financial health of their business.
If you are considering investing in commercial real estate, avoid these three common missteps.
1. Relying on the seller’s valuations
Commercial real estate is a big investment, but you should not pay more for an asset than it is worth. Doing so could have significant income and property tax implications for your business. Instead of relying on the seller’s evaluation of a property’s value, seek out your own independent valuations.
2. Failing to consider zoning
Local regulation is often very strict about how you can use land. Buyers often fail to consider the zoning of a potential parcel before making a purchase. Additionally, many underestimate how difficult a zoning change can be.
If you make this mistake, you could end up with a property that you are unable to operate your business out of. Before closing on commercial real estate, make sure for approval on zoning changes first.
3. Neglecting to have patience
As excited as you are to make a purchase, failing to show proper due diligence is a big mistake. You should thoroughly research a property and pay for inspections before rushing into a purchase.
As a business owner, you understand the importance of using common sense and diligence in your operations. Make sure to practice these qualities when looking for a commercial real estate investment.
