Finding a property that meets a company’s needs is among the most challenging things for some business owners. If you operate a going concern, or you’re starting the process of launching a new venture, you must consider several things when trying to make this decision.
One of the first things you must decide is whether you will lease or purchase a property. Leasing typically makes sense for a new business and those needing a prominent location, such as space in a shopping mall. Buying a commercial property is usually ideal for an established business that can make a financial guarantee and those that require very specific design elements.
Location
The location of a commercial property is often critical. You’ll have to think about the zoning and the availability of parking, proximity to major roadways and a host of other considerations. Ideally, you’ll find a location that’s easily accessible for those who work and/or need to visit the location. Before you make your purchase or sign a lease, be very thoughtful about all aspects of how a property’s location will affect operations, employees, clients/customers, the surrounding community and anyone else invested in the site.
Finances
You must ensure your business can pay a lease or a loan. If you’re leasing a property, you must read the lease contract to determine what you’re responsible for:
- Single net: Tenant pays for rent and property taxes. Landlord covers property insurance, repairs and maintenance.
- Double net: Tenant pays rent, property tax and property insurance. Landlord covers repairs and maintenance.
- Triple net: Tenant pays rent, property tax, property insurance, maintenance and repairs. These leases usually include a lower rent amount.
Buying commercial real estate also involves more than being responsible for the purchase price. You will also be responsible for the upkeep, repairs, property taxes and similar expenses.
Ultimately, you must do what’s best for your business. Seeking legal guidance to review the applicable contracts to better ensure you have the protections you need is going to be important.
