Are you considering the purchase of a commercial building in Illinois? Buying commercial real estate can be challenging, especially if you’re doing so for the first time. Doing your homework goes a long way to ensure that your intended property is a good investment. He is what you need to know before making the purchase.
Six essential factors to consider
A lot goes into buying commercial real estate. If one or more of these considerations are unfavorable, you may have to look for another property. Carefully consider the following:
- The infrastructure and surrounding neighborhood can raise or lower property value
- The building’s classification
- Conduct an inspection to determine the building’s condition
- Obtain proper financing
- Ensure that you have enough earnest money
- Hire the right experts to help complete the sale
Where your commercial building is located can make the business fail or succeed. It needs sufficient parking, complementary businesses supporting your operation, and proper zoning. In addition, the property should have the correct classification for your intended use. Always expect some type of hidden cost, but buying the building may not be viable if that cost is too much. Financing and earnest money go hand in hand. Make sure you have sufficient funds to buy the property and secure the type of loan to meet your budget. Finally, working with professionals like commercial real estate agents, accountants, and tax attorneys can help you make the purchase worthwhile.
Closing the deal
Although similar to residential, commercial real estate transactions are more complex. Take time to review the deal’s terms, especially its fine-print language that may reveal possible problems that could result in future commercial litigation.
The goal of purchasing a commercial property is to promote your business, not hurt it. Ensure that your intended purchase has the proper zoning and no issues with the title or environmental concerns, as these problems can significantly cut into future profits. Determining what you may have to repair or improve prior to the final deal can save you thousands and possibly millions of dollars in potential future profits.