When Is The Right Time To Buy A Business Property?
If you decide the time is right to buy business property you should go into the process knowing it’s going to be costly initially but that it could ultimately turn out to be a wise investment for both your business and your future.
While renting business space is an option that could save you money at first because it normally doesn’t require a lot of up-front spending, you won’t own the property and you could be at the mercy of regular rent increases and the chance the owner could sell the building, forcing you to look for new space and disrupting your customers.
When you purchase business property, you’ll need to consider money for a down payment and expenses for closing costs. With a fixed-rate loan you won’t have to worry about monthly payment fluctuations, and you will be building equity. Purchasing can also help build credit and provide you with a long-term asset, which could help you in the future if you need a loan for your business to expand. The property could even eventually be sold to help fund your retirement.
Since this is a big commitment, you’ll want to be sure to work with experts such as a qualified accountant and attorney when looking into the possible advantages of owning your own building. Can you afford the payments? Are there tax breaks to consider? Be sure to look into things such as local zoning laws and how they might affect you based on your business type or what you want to do with the property. Are all agreements structured properly?
You’ll want to work with an experienced commercial real estate broker who knows the community and can help you find the right property in the right location at the right price. Is the property the right size? Does it have enough parking for your current and future needs? Is it easily accessible to customers and suppliers?
Be sure to find a mortgage lender who can guide you through your loan options and financing needs, whether it be a traditional commercial mortgage or one backed by federal Small Business Administration. Experts say a good place to start is at your financial institution because you already have a working relationship with them.
In addition to finding the right accountant, attorney, broker and lender, you’ll also need discuss your insurance needs with an agent who can make sure you have the right coverages to protect your new investment.
Give yourself a pat on the back for making the decision to move forward on a business property. You’re looking out for your business and your future.