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Buying Commercial? – Tips to Avoiding a Nightmare!

Buying a commercial building can be difficult to navigate, from timing to maximizing the investment value, to making sure it’s the exact right fit. Business executives and entrepreneurs all run into these hardships when trying to acquire commercial real estate.

Buying commercial is filled with risk, as a buyer, seller, agent, and renter. They can all feel the consequences of a bad deal. That being said, when done right, the rewards can outweigh the risks.

You aren’t going to find a one-size-fits-all method for buying a commercial building. You need to weigh everything involved, what is your business niche, where is the location, what is the demand. One must become knowledgeable in what is needed and wanted for their exact niche.

The Big Question: Buying vs Leasing

When looking to purchase a building you of course need to decide if buying is the correct option (not trying to sell you out of buying if that is the correct choice). You need to look at everything before you pull the trigger on your purchase:

Is the location correct?

Just because the building is in an up-and-coming area that doesn’t mean it will stay that way. Locations that were once desirable may become undesirable. Location, Location, Location!

Will it be worth the same when it is time to sell?

As with the correct location, it isn’t always easy to sell real estate when the area is in a slump. But on the plus side, having something to sell is better than nothing.

How much will you need to invest?

Depending on what condition you buy your property in well depends on how much you might need to invest in repairs and renovations. But once again, when it comes time to sell you might have a profit on your hands based on how much you upgraded your investment.

Risks or Rewards?

Regardless of your location, niche, or budget; a commercial building might represent a great investment if you take time and learn the ropes first.

Any investment comes with risk. If you try to jump headfirst into buying without a solid foundation in place, the risk becomes magnified. Consult professionals, assemble a solid team and do everything possible to protect yourself in the event of a problem.

Bonus: How Collateral Works and How Owning Can Help

Collateral is anything that can help guarantee a loan. When one borrows money, they agree (the fine print) that the lender can take and sell something to get their money back if one fails to repay the loan. Thus making it possible to get large loans, and improve one’s chances of getting approved if they’re having a hard time getting a loan.

This is why owning property might come in handy in the long run, thus giving owning one more plus than leasing.