In my last post, we have discussed some tips on buying residential properties. Today, its turn for commercial properties. Actually buying a commercial property is quite different than buying a residential property. The parameters to be considered before making investment in commercial property is totally different than those of the residential ones. Let us do a quick check as to what are the considerations you should make while making an investment in a commercial property.
1. Type of the property – Before making any decision, evaluate what kind of a commercial property you are looking for. Is it a store space in a shopping mall, or a office space in a building, or a land.
2. Look for property that matches your budget – Once you have made the decision, start looking for a property that matches your budget. It is important to match up with the budget specially if you are buying it for the purpose of investment and not for the dire need. It is not a good idea to go overboard specially in case of property investment as you may end up messing up your regular expenses and savings for emergency.
3. Evaluate the location – Evaluation of the location can be done before or after finding suitable property(s). Specially if you are too strict on budget, you may not find a property in your preferred location. However, even if you do the latter, evaluation of the location is important. Consider the type of property and if the area is suitable for it. Say you are looking to buy an office space, a location in or atleast near the business hub will be more profitable even if it is a bit low in terms of facilities. Whereas a well-facilitated plush building at the outskirt of the city is likely to fetch you less. Similarly a land suitable for factory site should have good drainage facility and enough open space around. If you are looking for a store space in a mall, check out their daily average footfalls.
4. Rental income – Before putting in your money, you must well consider how much it will fetch you back. Make a good market study and further better consult a good property consultant about the market value of the property.
5. Negotiate a good deal – Negotiation is the mantra for any good deal. Do a proper and logical negotiation till you are steering out the best deal for yourself in terms of money, locality and property features. Specially, keep sharp eyes for any additional and hidden costs as they are likely to overload you later if not considered before hand.
6. Maintenance costs – Maintenance cost is mandatory be whatever property you buy, residential or commercial. And therefore do a proper evaluation of the age, built, and condition of the property before hitting the final deal.