The overall risk involved when choosing a commercial property is far greater than a residential property. Whether you are thinking of renting or buying a property for commercial use, you have to be careful about credit/default risk (ability to meet financial obligation). Similarly, the regulatory risk and environmental risk impacting a commercial property are also greater than a residential property. However, there are a few important things that, if you are careful about, can reduce the overall risk factors as well as help your business to grow when choosing a commercial property. Here is a list of tips for choosing a commercial property and how to tackle these problems.
Location, location, and location
When choosing a commercial property, the number one factor that impacts the business is the location. Depending on the business, location can save you money, increase cash flow, reduce multiple risk factors including regulatory risk and environmental risk. Meaning the location of your commercial property is an important factor. For example, if you have a business that doesn’t involve dealing with clients at all or dealing clients remotely, a location set outside the town might be better and far more cost-effective. But the same can not be said for restaurant businesses. Because the more close a restaurant is to the city center, the more possibility for your business to generate more cash flow.
Furthermore, if you are to build an industrial building, choosing a location outside the designated area may be cost-effective but you are far more likely to put your business into regulatory risks and environmental risks.
Accessibility is key
A business must be accessible to the end-user and others involved with the business to be successful. Regardless of the business type, if your commercial property is not easily accessible, your business can suffer a lot of damages. Some of these include increased cost, supply delay, time, and business loss. Banks and restaurants, for instance, need easy accessibility and connectivity in order to attract and retain customers. Likewise, super shops clothing store or any kind of business that directly deal with customers need smooth physical connectivity to run successfully. Accessibility is also closely connected to reputation and trustworthiness.
Plan the budget
Planning the budget is one of the most effective tips for choosing a commercial property. In any business, if the budget is not planned, proper execution is not possible. So just like accessibility and location, costing is also very important. Whether you rent or purchase a property if the budget is not planned properly, your entire business can face credit or default risk. Commercial property rarely comes cheap and if a certain budget is not allocated, it can jeopardize the business operation. This will also help ease the selection of the commercial property amongst the available options.
Availability of Support Services
Support services such as parking, lift, security, etc. must be considered with utmost importance while finalizing the commercial real estate. Availability of these services not only helps run the business successfully but also contributes to the resale value or determine a better rental in the future. Also power backup is equally important when choosing a commercial property to function smoothly.
Flexibility and Scalability
Is there any scope of expanding the property in the future? If no then, consider choosing another one. Because an ideal commercial property should be flexible and expandable when needed. It is inevitable that your business will expand and change in the future whilst you are occupying the property. So it is crucial to find premises that are scalable over the years to suit your business. It will also help to deal with any regulatory issues if arises any.
These are some of the tips for choosing a commercial property. However, start from the very beginning, conduct thorough research before you buy or rent any commercial property. Otherwise, your decision can backfire and cost you big money. Remember there is no one-size-fits-all strategy when choosing a commercial property. The risk is too great. That is why always carry out a detailed in-depth risk assessment and analysis before taking any decision.
