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There are as many kinds of commercial buildings for sale as there are businesses that want to fill them. That can make for a crowded market at times, and often makes it difficult for business owners and startups to know what they should look for.
If you’re not sure what kind of space you need, or how much space you’ll need in your location, that just makes things harder.
Looking for commercial real estate doesn’t have to be a headache though. Keeping your budget and goals in mind can help you narrow down the possibilities and finding the perfect space and perfect location isn’t as hard as you might think.
Here are some tips and tricks that will help you find the right commercial buildings for sale, and then narrow down and find the right one for your business’s unique needs.
What To Look For When Searching For Commercial Buildings For Sale
When you’re looking for commercial buildings, it might seem like simple advice to stay within budget, but it’s also some of the most important advice and one of the biggest missteps that startups and new business owners are likely to make.
Why do business owners forget about their budget when they’re choosing a location?
Well, there are a few reasons, but it usually comes down to the style and appeal of the commercial building combined with the location. Lots of startups get the idea that having a good location and a cool building is going to help them overcome the hurdles of overspending.
Unfortunately, those kinds of decisions rarely work out.
Remember, you can always upgrade your business as you go, or find a new location when you have a bigger budget to buy or lease a new commercial building.
There are three basic things you need to look for when you’re deciding if a building is going to work for your business:
- Is the space big enough to do what you need now, and to grow over the lease/at least the next 5 years?
- Do you need customers to be able to find your physical location? If so, is it convenient to transportation options? Does it have enough parking? (This is one area where location does matter)
- Is the building in good physical condition, and does it meet the requirements for your business from a zoning perspective? The last thing you want is a building that’s going to need months of asbestos remediation or that needs electrical or plumbing work before you get started.
If a building clears those three hurdles it’s probably a good opportunity, whether you’re considering buying or renting.
Remember, ideally you won’t have to change locations too many times unless you’re opening a second or third physical location. Any building you choose to buy should be suitable for at least a couple of years of normal operations and growth.
Every time you have to change buildings you risk losing customers, will have to update your Google Business profile and other search information and will have to deal with the logistics of setting up a new location.
For the last question, in addition to the physical condition of the space, it’s important to figure out whether the local zoning laws allow for your kind of business. While it’s sometimes possible to get a special permit to operate your business in a different zone, it can be difficult, expensive, and probably isn’t worth it.
Zoning issues may limit your choices slightly, especially if you’re looking for a commercial property in a specific area, but don’t get too discouraged. Finding the right property is a process, and chances are, when you look closely, there will be good options in the area you’re considering, or in a nearby area that still suits your business’s needs.
It’s also important to know what kind of property you’re interested in buying or renting. There are 5 basic types of commercial buildings:
- Multifamily: residential properties with room for more than one family, which can be as small as a simple duplex and as large as apartment buildings and assisted living communities.
- Office Space: buildings designed to be used as office space, sometimes for a single business, and sometimes designed for several.
- Retail Space: Buildings, or individual units inside of a larger building, meant for businesses that sell goods directly to customers. Often located in commercial areas, strip malls, and near business areas.
- Industrial: These locations are meant for manufacturing, from heavy manufacturing to lighter assembly work – Suitable for a business that specializes in producing products.
- Hospitality: Hospitality spaces specialize in all aspects of the hospitality business and can include everything from hotels to short-term rentals, restaurants, and entertainment spaces.
Knowing what kind of property, you’re looking for will help you find the right location. Just remember that the three rules we already talked about, and your budget, are critical too.
A failed hotel might look like a good opportunity if you’re looking to start a hotel business yourself, but not if the reason it failed is that it’s too far from places of interest in your city, or if the price of the hotel itself exceeds it’s earning potential.
Remember, especially with office and retail space, if you end up having more space than you need it’s relatively easy to rent out the extra space. Just don’t count on being able to do so in the budget. Extra money is always a bonus, but you don’t want to put your business in financial trouble just because it took longer to find a renter than you expected.
These considerations are important whether you’re looking for a space for your business or are looking to invest in and flip commercial real estate. Identifying a good business opportunity is just as important for flipping a location as it is for finding your next business location.
Should You Buy Or Rent?: How To Decide What You Should Do When You Find A Commercial Building For Sale
Deciding whether to buy or rent can be one of the most difficult parts of choosing commercial real estate.
Buying a space gives you a lot more options, including the flexibility to remodel as needed, to customize the space, and rent out unused areas to other businesses.
But it also comes with more risk. Buying costs more upfront, and you’re assuming the risk of paying the mortgage even if the business you’re buying for doesn’t work out.
Additionally, the higher costs of buying put a lot more pressure on your finances at the outset, which puts more pressure on you and your business to turn a profit quickly.
Renting, on the other hand, can be a slightly safer option, but gives you less freedom to customize the space and make it yours. You also run the risk that the property owner will choose to close your lease at the end of your contract instead of letting you renew.
Really, to decide whether you want to buy or rent you need to know why you’re interested in getting into commercial real estate in the first place.
There are a few different reasons people start buying commercial real estate:
- Are you buying to use the space, or to rent it out?
- Are you buying to build equity?
- Are you looking to generate passive income?
- Do you need an expanded space for your existing business?
- Do you need a starter location for a new business or an offshoot of your current business?
Buying commercial real estate is a viable investment strategy, as well as a critical part of running many businesses.
It’s also okay if you have more than one goal when you buy commercial businesses. For instance, it’s alright to want a commercial space that you can use for your business for now, but that’s also going to be a rentable property later on when your business grows and needs something larger.
The key here is understanding your motivations so that you can find a property that meets all of your qualifications, rather than settling for a space that works but isn’t going to be able to do all of what you need it to.
How To Find The Perfect Real Estate Agent That Can Help You Find Commercial Buildings For Sale
Buying or renting commercial real estate can be complicated. It’s about a lot more than just finding a space you like, like in residential real estate, and there are a lot of different things you need to remember and understand if you want to find the right space.
Fortunately, you don’t have to find the right commercial building on your own.
Having a commercial real estate agent on your side can help you narrow down your search to the most likely candidates, with your business needs and long-term goals in mind.
At Teifke Real Estate we work closely with all of our clients to make sure we understand your needs, budget, and goals, no matter what kind of property you’re considering. We can help you find the perfect rental, or with the process of buying a property outright.
Not sure you’re ready to get a commercial property but want a better idea of what to expect from the process? Teifke Real Estate also offers coaching services to help you know when you’re ready, and what kind of budget you’re likely to need for your commercial property dreams.
No matter what kind of property you’re looking for, or where in the process you are, Teifke Real Estate can help you get there. Contact us, we’re ready to help!
