Are you looking into investing in valuable commercial real estate in West Chester, PA? Here is a detailed list of questions that you can check as you pursue a smooth and ultimately rewarding commercial property purchase.
How much real estate can you afford?
It should go without saying that the very first thing you need to consider is how much money you have to purchase a commercial property. Knowing exactly how much you can put down as your down payment and the size of the mortgage that you can borrow will guide your decisions further along the process.
The case for buying the property with other investors
One way to ease the financial weight of a commercial real estate purchase is by purchasing through a property syndication. By partnering with other interested investors, it will be easier to buy property that you may not afford on your own. Working with a group toward a property purchase will need several more considerations, however, such as:
- What structure will the syndicate adopt?
- What role will you play in the group? Are you the syndicator/sponsor or an investor?
- How well do you know the other investors involved in the purchase?
- How are profits going to be distributed among the investors?
- What are the risks involved in this type of venture?
What are your investment goals?
Every business venture requires a detailed and carefully thought out plan. You should have a clear idea of what you want to achieve in acquiring a commercial real estate property. And because investing in real estate is a long-term endeavor, you must also develop a projected timeline along which you can measure your targets and accomplishments.
What type of commercial property do you need?
Determining the kind of commercial property you want to put your money into is another important reason you’ll want to be clear about your goals and objectives. Commercial property can come in the form of office or retail space, as well as industrial property. Which of these uses does your investment plan require?
On this note, you might also want to look into the adaptability or flexibility of the property. Can the property be repurposed for a different type of business operation in the future? If so, this can open the doors to more earning opportunities for you in the future.
Location, location, location
This real estate mantra applies in choosing commercial properties as much as it does with residential properties. In addition to ensuring that your commercial property is as accessible as possible to your target market or tenants, careful selection of the location also involves doing your homework about local zoning regulations that may limit or restrict how you can utilize the property you are investing in.
How do you want your property to be managed?
For any investor, the ideal scenario is that their commercial property investments can earn passively, especially if you are investing in a property that is located far from where you live. For this to happen, a reliable manager or management group will be another important consideration on your list.
Assessing the condition of the commercial property
There are certain advantages to buying an older building or property. One, it will likely be located in an established and easily accessible location. In addition, you may also be able to acquire it a more reasonable price, allowing you to eventually earn larger returns.
On the other hand, older buildings may require higher maintenance, repair, or renovation costs that could force you to spend more money up front. This is why getting a professional inspection of the property should be an essential part of your pre-purchase process.
Unless you have enough cash on hand to splurge on your commercial property purchase, you will need to look into your financing options. Mortgages for commercial properties are different from home loans, so consult closely with your real estate agent for their recommended lenders and financing tips.
The legal aspect of owning commercial real estate
Buying and owning commercial real estate also involves different legal circumstances compared to transactions dealing in houses and other residential properties. Look for a reputable commercial real estate attorney in your area who can provide you with the necessary guidance and representation that you will need, from completing the purchase to handling any potential dispute resolution scenarios that might arise in the future.
For more useful real estate tips for buyers of commercial or residential real estate in West Chester, PA, get in touch with RE/MAX Direct. Our local experts are always eager to hear from you and help you achieve your goals. Contact us today at 610.430.8100 or remaxdirectwc(at)gmail(dotted)com.