Finding the perfect commercial property requires more tact and research than most people plan for. Your choice of commercial property is a strategic business decision. It affects profitability, production costs, branding, and bottom line. This is why you must find a perfect property that promises great potential as per these factors. Here are 6 tips to landing a perfect deal.
1. Define your Commercial Property Parameters
A perfect commercial property should suit your business needs. To find the right property, you need to define your needs. Narrowing down your needs helps you save time and money that would be used for future adjustments. Some of the factors to consider include:
· Floor Plan
What kind of floor design do you need? What size is most appropriate for your business? Every business has different floor needs and space use. The rule of thumb is to have four to six employees for 1,000 square feet. The property should allow movements, display, accessibility, and meetings as your business may require.
· To Rent, Lease, or Buy
This decision determines property use. it also affects your budget. If you are buying, you may need to think about tenants that may come in the future. If you are leasing, you may need a property that allows modification.
· Availability of Target market
When finding the perfect commercial property, consider the flow of your target market.
· Financial Position
Different locations come at different prices. Central business district is more expensive than suburban location. Strike a balance between the other needs discussed and your financial ability.
I could write a book about location, and why it is the most important consideration when finding the perfect a commercial property. Here are a few considerations when it comes to location:
· Zoning Restrictions
A location with favorable zoning laws makes it easier to run a business. The business should operate freely without zoning restrictions to its main economic activity.
· Rental Rates in the Area
If you are buying the property, you might need to rent or lease it out to the tenant. Therefore, consider areas that fetch more rental income. If you are renting out, understand the market rates of the area. Modern spaces and those close to central business districts will cost more.
· Human Traffic and the Right Community
Establish your business and property in the right community. Today, people are all about convenience. Millennials want to shop, work, and eat in the same area with less commuting. Have these developments in mind.
A commercial property should be visible and well-maintained. Some marketing experts consider it a perfect branding strategy.
· Community Safety
Security is one of the three top things people consider when finding the perfect commercial property. It must guarantee safety of its users. Do not start shopping property in areas notorious with crime and lack of safety no matter how convenient they may seem.
3. Ask your Employees
How do your employees feel about moving to a new business location? Ask them how they find it in terms of commuting, work environment, safety, and ambiance. We all know office environment can affect performance. You could release a survey to find out how they feel about the new location. When you go shopping, once in a while step out with an employee or two and find out how they feel about it.
Customers that often visit your business need to have say in your location. Will your customers find it tedious coming to you? Is it going to be more expensive? Some zoning restrictions may impose difficulties to customers. You need to find these answers before settling on the property.
If you want to know the truth about a property, engage the bystanders as well. They will let you know more about the landlord and the prevailing rates.
4. Legal Considerations
Several legal issues such as health, planning permission, insurances, safety, and fire regulations and licenses feature significantly. When you choose to purchase the property, you need to pay stamp duty. For a rental commercial property, you will need to comply with lease terms. Involve a solicitor when buying or leasing commercial property.
Find out if you are legible for assistance with business rates such as the Small Business Rate Relief. Ensure that the building complies with environmental and building conditions assessments. Ensure that the building is zoned for your business needs and that it complies with the best practices. For instance, you cannot take a property zoned for office space and convert it to a restaurant.
5. Lease Terms
When looking to rent your commercial property, have a budget and long-term business plan in mind. With this, you can ask the property manager the right questions.
- How much is the rent?
- How much is the security deposit and for how many months?
- Does that include utilities and operating costs?
- Does the landlord take care of property taxes and maintenance including repairs?
- Are there additional fees such as parking or penalty for late payment?
Make the next step and examine the terms of the commercial lease. These include location, structure, and space of the property. Find out if there are any rules and policies such as:
- Permitted use – specified business activities for the property
- Sublease/ Assignment – are you allowed to sublet or sublease the space to a new tenant especially with extra space?
- Lease duration – is it fixed or month-to-month lease
- Insurance – who caters for property and contents insurance?
- Improvements and modifications- find out if you can renovate or remodel the space to fit your needs, or add or remove furnishings
Ensure you understand all the terms before signing. Read through every punctuation mark.
6. Work with a Good Real Estate Broker
Even a bad real estate broker knows more than a typical tenant. Find a real estate broker that understands the location well. Even though you may have to pay extra for the services for some properties, brokers come with several benefits. They help you negotiate better lease terms, they have knowledge of more commercial properties that you can compare, they take care of the hustle and they can give you facts about the property: landlord, traffic, safety and other underlying issues
If you are in the process of finding the perfect commercial property around Orange County, we have both tips and great deals on commercial property. Visit our website and tell us what you are looking for.