Your guide to the ins and outs of commercial real estate

Commercial real estate is any property that is not residential and is used for profit. Restaurants, shops, offices and warehouses are all examples. Whether you need an office or a warehouse, finding the right commercial space is essential. The success of your business depends on the right choice of commercial real estate.

How do I buy the space?

If you have enough capital to buy a place, that’s great! If you’re just starting your business and can’t afford to buy space, you may need to rent or lease. This can be a bit trickier. Leasing contracts are complicated, and it is advisable to have a lawyer review the contract before signing it. Many inexperienced renters accept the landlord’s contract without making any changes, and this can be dangerous. You could end up agreeing to a lease that gives the building owner too much power over you and your business, or you could even overpay for lesser space. If you decide to buy, have the building inspected for structural problems so you are not saddled with unexpected maintenance costs. You want to be sure you know what you’re getting into before you sign.

When should I buy/lease?

If you have, or know you’re going to have, items to store or employees who need a work space, then it’s time you found a place. You also want to make sure you can afford the property. Capital, from your business or from investors, will need to be saved up front for this purchase. You also need to be sure that once you have the space, your business will make enough money to continue renting. Time is very important.

Where should I buy/lease?

The location is key. If you’re opening a store, restaurant, or any establishment that needs human traffic to make money, you’ll want to be somewhere that has a lot of pedestrian activity. Downtown areas of the city are good examples. You should also do some research to make sure there isn’t another established business similar to yours nearby creating competition. Do more research to ensure that your business is in demand wherever you decide to open a store.

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 endeavors.

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