Posted on: 14 April 2015
The rental industry can be extremely lucrative, and you don't have to stop with residential properties. Investing in commercial rentals can be a wonderful way to expand your portfolio, but if you aren't experienced in this business, then you should know that it is quite different from renting out a residential property. To ensure the best possible success, make sure that you do these three things before purchasing and renting out a piece of commercial property.
1. Hire a Commercial Real Estate Lawyer
Renting out a residential property can be relatively simple, but things can become much more complicated when you are renting out a commercial building. In many jurisdictions, business owners have more rights and are more difficult to evict. Plus, most business owners are going to want a longer-term lease than a residential tenant, and many businesses have to make more permanent changes to commercial structures in order to make them fit for their purposes. With all of these complications and differences, it's often smart to hire a commercial real estate lawyer to help you from the very beginning.
2. Check Out the Value of the Location
People are often willing to rent homes just about anywhere if the price is right, but the same is not true for a commercial building. Business owners want to ensure that their businesses will succeed when they rent commercial properties, so it's important to check out the value of the location. Look at nearby businesses to see how well they seem to be doing, and look at how much other rental locations in the area are renting for. You probably also won't want to buy in an area where there are a lot of empty commercial buildings for rent, especially if they have been available for a long time.
3. Make Sure the Building is Up to Code
The building codes for commercial properties are often much stricter than the building codes for residential properties. Therefore, you will probably want to have any potential rentals checked out by a local inspector to ensure that they are up to code for commercial use before purchasing them.
Buying a commercial rental property can be a great investment, but it's important to be careful. If it's your first time around, you might be unsure of yourself, but following these tips and working with the right lawyer can help you be as successful as possible with your new venture. To learn more, contact Steve Butcher Sr.Share