Expanding your business or company is an exciting event. It marks a specific milestone in your professional development. But even though this prospect can be an exciting and enriching venture, there are some things to consider before moving ahead. Here are our top 3 picks for what you need to know before you even start thinking about building.
“Real estate cannot be lost or stolen, nor can it be carried away. Purchased with common sense, paid for in full, and managed with reasonable care, it is about the safest investment in the world.” – Franklin D. Roosevelt.
Never a more faithful word spoken when it comes to the world of real estate development, including commercial property development. So when your business has reached the point where it’s time to expand or even seek a new site, it might be worth it to acquire and develop your site instead of leasing space or land. But, as with all things financially minded, there are some critical considerations.
Before you make that first phone call to your realtor or commercial property specialist, you need first to place a call to your accountant, then your bank manager, and then possibly your therapist. All jokes aside, this is a big commitment, and you need to understand the pros and cons of what this could mean to and for you. Sure, time is of the essence in all aspects of your business, but when it comes to commercial property acquisition, resist the temptation to buy, buy, buy. A good realtor will guide you to what you need, not what they want.
Understand the maximum financial exposure you can comfortably risk, and then take a few percentage points off. That number somewhere between your lowest and highest risk is where you want to be playing. Especially true if this is your first commercial acquisition.
YOU MUST KNOW THIS IS COMING…LOCATION, LOCATION, LOCATION
When it comes to real estate of any description, there can be no more a precious word than this one: location. It sounds exciting to speculate in developing areas with great potential and outstanding returns on investment. Still, there’s probably a good reason for all of those things, and if you don’t know what that is or you’re not specifically skilled in speculating, don’t. You can always upgrade later when things go well, and a slow and steady acquisition portfolio is what will ultimately diversify your companies investments and financial interests. Still, it’s a very different matter trying to recover from a bad investment. Companies have sunk for much, much less.
PLANNING, ZONING, AND CONSTRUCTION
Your contractors, architects, and consultants should all be able to offer something of a “turnkey” operation here because that is ultimately their area of expertise. Still, it doesn’t hurt to keep your eye on the ball, and while you’re doing that, you’ll be learning a thing or two yourself. There are all sorts of planning that you have to consider when developing commercial property (or any property for that matter). If you’re building from the ground up, what sort of groundwork needs to be done first? How much parking do you need? Paving? Have a look at https://www.keflatwork.com/parking-lot-paving/ for some ideas.
These questions may seem elementary, but when you take care of the finer details, the bigger ones take care of themselves, so give it your all and invest as much time and energy as possible into your due diligence. You cannot overdo the plan, and you will reap the rewards of considered thoughtful planning in the future.