IBISWorld reports that the commercial real estate industry in the US will be invaluable $1.1 trillion in 2022. Commercial property is in high demand, so this sector is undoubtedly an amazing place to put your money. However, acquiring a commercial property is not like buying a house. Basically, you are searching for a building that can offer you an amazing return on your investment rather than a place to live. It’s important to do your homework well and know the unique things to look for when buying a commercial property. Here’s what you should know before investing in commercial real estate.
- Building security
Commercial buildings must follow strict safety regulations to be considered safe for people to use or work, unlike residential properties. However, some investors rush into buying buildings that fail all the required health and safety checks. These investors normally must spend more to improve the security standards of the building before leasing it to interested parties. Therefore, at all times take the time to perform a security hazard check, electrical check, and other important testing before buying a commercial building. You’ll often find little issues here and there that can be easily fixed, so you should not abandon an acquisition simply because they popped up. For example, a poorly maintained elevator in a commercial building can easily be repaired by experts such as https://www.sheridanlifts.com/lift-maintenance/ to reduce the frequency of breakdowns and keep you legally compliant.
Research shows that sounds louder than 85 decibels can damage your hearing. Therefore, soundproofing is extremely important to remember when buying commercial real estate. Noise is a major feature of many commercial properties because of the massive number of visiting individuals and business operations that occur within them. However, few people will have an interest in renting office space in your commercial building if they can hear the noise from neighboring companies. Therefore, it is extremely important to invest soundproof buildings to increase your chances of renting out space.
- Property classification
Any building used for business purposes qualifies as commercial real estate. However, there are different classifications for various kinds of properties that are worth knowing about. For example, office buildings are grouped into Class A, B, or C. Class A properties carry the lowest level of risk compared to Class C properties, which have the highest level of risk. Likewise, retail stores and industrial properties have special designations. Therefore, it is extremely important to understand the classification of the commercial property you’re looking to amass and what that means for you as an investor.
- Planning regulations
Commercial Property owners often want to modify their buildings after acquiring them, as are house owners. It might make sense to include an additional floor or build a new parking area. However, these enhancements require planning permission to proceed, and you may be disapproved. Expanding your commercial property in an area with strict planning regulations may be illegal. As a result, check with the local council of your chosen property to see if there are strict rules in place to avoid buying a building you cannot modify.