There is a unique criteria for every buyer when it comes to purchasing commercial real estate. But no matter what your circumstances, there are still fundamental questions that you should ask during the consideration phase. Here are the top 10 things you need to think about before buying commercial real estate.
- Thinking in the future for your finances can help you avoid disaster. In an article from the BDC, Canada’s business development banks, they recommend, “Try to take into account all growth that could result from planned projects, as well as your future borrowing needs.” Taking into account not only what you need now, but what you might require later to set up for success.
- If you went with one of the first options presented to you, think twice. Did you take a reasonable amount of time to select your space? Even though it might seem like you are getting a great deal, it is important to take your time.
- If you are in a building with multiple businesses, consider the other businesses. If they are not drawing in business, they could weigh yours down. At the same time you should also be sure the goods and services they offer are not similar to yours. No one wants competition in their own building.
- Read your lease agreement very carefully. If you are planning for growth and in a small building, you don’t want to be locked in to a location that can’t support them. As The Globe and Mail rightly states, “New and expanding businesses often experience unexpected demands, including growing beyond what their current facilities may be able to accommodate.”.
- Stick to your list. Some types of compromises are inevitable when you are considering your buy. But don’t lose sight of your original wants and requirements. Keep a list in view of the aspects and details that are important to you. If you find yourself coming more than halfway just to save money, you might be making the wrong choice.
- After you purchase a space, you will find yourself dealing with inspections, codes and required alterations. Be a step ahead by bringing in a contractor before you purchase to do an assessment. Getting saddled with unexpected large alteration charges could break your business.
- Buying a space is an exciting time. It is easy to overlook the details of the surrounding area. That’s why it’s important to consider zoning. “Ensuring zoning is in compliance with applicable zoning laws should be included in your conditions.”, according to the Financial Post. Otherwise you could find that you will have extra hoops to jump through before you can start to operate your business.
- Your real estate agent will be a vital partner in your search for the best space. Choosing a real estate agent who is experienced can make the difference between you finding the space that fits your needs.
- Another partner who can influence your decision is your lawyer. Before you buy, make sure you have given your lawyer a chance to read the fine print as well. They may be able to spot loop holes and future problems that you cannot see.
- When you find the perfect space, it is easy to accept the first offer. You want to make sure the space is yours and that you aren’t losing out on your perfect find. As a rule of thumb, you should still negotiate before you buy. You should never accept a first offer. It might seem difficult in the moment, but you will thank yourself later when you have saved in the long run.
If you are looking for more tips or advice concerning your commercial real estate needs in Canada, contact us today!