Successful commercial property investment requires considerable research and knowledge – such investments involve large sums of money, potentially significant returns and big risks. Carrying out due diligence is key to maximising your gains and minimising risk. Having a comprehensive understanding of the basics of commercial property investment will stand first-time buyers in good stead, helping you avoid the potential pitfalls that can create problems down the line.
Here, our commercial conveyancing solicitors shed light on some essential considerations that every commercial property buyer should keep in mind.
When planning your first investment, it is crucial to think about exactly how much you can afford to invest and, if your investment is unsuccessful, how much you can afford to lose. Commercial property covers a broad range of potential investments, from small shops to large corporate headquarters, so identifying the right premises is vital. You should also consider matters such as location, infrastructure, socioeconomics and the skilled workforce available.
Making informed commercial property investments relies heavily on having a thorough understanding of the current state of the market. It is essential that you learn the ins and outs of the commercial property market, examining the latest trends such as value changes in particular areas and emerging technologies.
The commercial property market can be an intimidating place for first-time buyers. Despite doing your research and due diligence, there may be times when you need additional help. If this is the case, don’t be afraid to instruct experts and professionals with experience in commercial property investment to provide the support you need.
If you identify a property of interest, be cautious. Take the time to scrutinise whether or not investing would make sense for your business in all ways possible. Think about legal issues such as building regulations and planning laws and commission a professional property inspection to ensure that your investment isn’t undermined by something you didn’t consider.
As with all forms of investing, taking a focused and clear-headed approach is hugely important. Don’t expect too much too soon – keep your objectives in mind and have a clear idea of how you will finance your purchase. Study the market carefully and remain patient, waiting for the right opportunity to arise. When it does, be ready to make your move and reap the benefits.
Before you look to invest, you’ll need to get your finances in order and consider whether, depending on your financial circumstances, purchasing or leasing would make more sense for you. For most first-time investors, leasing will be the more realistic option – but you’ll need to locate funding to proceed. You may want to approach banks, credit unions or mortgage companies, but other more creative funding strategies such as earn-outs may also be an option.
For comprehensive commercial property advice, call Wilford Smith today on 0808 168 5813 or complete our online contact form to find out how we can help.