Questions to Ask When Buying Commercial Property
What Questions to Ask When Buying Commercial Property?
Many first time buyers and investors are not aware of questions to ask when buying commercial property. It is important to highlight the fact that not all commercial properties across all states are going to be the same. All properties depending on their category will require a separate set of questions. However, there is a basic set of questions that you need to answer before proceeding with the purchase.
In this article, we will look at what questions to ask when buying commercial property. We will also examine various types of properties and what you should consider when purchasing commercial property. As always we strongly advise that you weigh the pros and cons of each potential investment before moving forward.
The basic property research checklist
When it comes to buying commercial properties, there can be many different questions that you should ask. However, please consider the after-mentioned list of questions for buying a commercial building during the initial stages of prospecting.
- Is there any insurable access to the property?
- Does the commercial property have tenants?
- What is wrong with the building or what could be wrong with it?
- Is the title clear?
- Does the building serve your proposed use?
- Does the structure conflict with any existing zoning laws?
Buying Suites and Office Buildings
The property research checklist applies to all types of buildings. However, restaurants, showroom space, and office buildings are all different types of properties. Office buildings offer the best return on your investment when the market is booming. On the other hand, restaurants are going to be profitable in a densely populated area. So, your decision between the two will depend on where you are buying and when.
Statistics On Multi-Family Property
- Vacancy and Absorption Rates: 8.6%
- Prices, Rents, and Capitalization Rate: $196 Price/Sq. Ft. 1.44 Annual Per/Sq. Ft. CAP Rate – 5.6%
Buying Multifamily Property Checklist
Multifamily properties are very different from purely residential and commercial properties. Use the below checklist when prospecting:
- Schedule a complete check of the entire building, ie. each block and apartment
- Photograph the assets in detail
- Get the market’s property report
- Make sure that all bills and other related dues like taxes are cleared
Top Five Buy & Sell Markets for Multi-Family Real estate.
- The top five “buy” markets are Houston, Raleigh-Durham, Salt Lake City, Fort Worth and Charlotte.
- On the other side of the coin, Miami, San Jose, New York City, San Francisco and Oakland are the top five “sell” markets.
Take your time
While there are many questions to ask when buying commercial property, the important thing is to take your time. Getting answers takes time and so does doing the math. So, unless you are very sure about a commercial property never rush into a decision.