Every few years, the real estate industry collapses, leaving small and medium-sized businesses with a dilemma: is it better to own or rent commercial property? Buying commercial property is a complex business, making it difficult for experts to maximize the value of your investment. There is no one-size-fits-all strategy. The following guide takes a realistic approach to solving the dilemma of whether to buy or rent commercial property.

Deciding to buy or lease

When weighing your option, you need to understand the risk involved. Below are some of the risks involved:

1. Location can backfire

You’ve probably heard the saying “hot today can become not tomorrow.” This common saying applies to commercial properties. Trendy locations have a high probability of losing value quickly. Even places that don’t seem fashionable at first glance have the potential to “go out of style” as a trend. There is a chance that the market will break down, possibly making any area you choose undesirable.

2. Loss of liquidity

Selling your property is often not easy. A business that owns real estate needs its real estate to be worth some money for at least something that, if necessary, can be converted to cash.

3. Weak cash flow

If you are a business that owns rental property, your cash flow will be compromised if a tenant stops paying rent and your property requires unexpected and expensive repairs.

Assemble a team of experts

Not everyone is a commercial real estate expert. So it’s important to connect with the team of experts who can help determine the right locations, the right time to buy and sell, and the basics of the deal. To create a team of experts, you may need the following people:

1. Accountant – Can help you analyze tax and operational benefits and determine what you can afford.

2. Lawyer – can negotiate with the lender and seller on your behalf and help you complete the transaction.

3. Commercial agent: He or she can help you identify potential properties that you can afford.

4. Mortgage agent: will resolve all financial matters of the property.

Identify the correct property

There are several factors to consider when making any real estate purchase:

For. Location – Location is very important as the location needs to be convenient for your vendors, suppliers, workers, and of course your customers as well. To determine the appropriate location, consider what type of business you are running, as well as how accessible the location is to highway, rail lines, and shipping lanes.

B. Physical condition: The physical condition of the selected location must also be taken into account. Beware of any wear and tear, environmental issues, or any other potential liability.

vs. Permitted Uses: Get the right building for your type of business. For example, manufacturing companies require industrial space. Accounting firms require office space.