5 Important Questions to Ask When Buying Commercial Property

Buying a piece of commercial property is a big step, and shouldn’t be taken lightly. You must use your expertise, knowledge, and analytical skills to determine the right time to purchase a commercial property (or even multiple). There are several factors that you should consider to help you make an informed decision. So what are these factors, and how can you be prepared to talk about them with your realtor? We have some tips from the experts! Let’s take a look at 5 important questions to ask when buying commercial property.

5 Important Questions to Ask

It is essential to do your homework before making a decision when buying a commercial property. Ask the seller or search about the following important things.

1.     Why is the Commercial Property on Sale?

You should consider the reasons behind the sale of a commercial property. Why the owner or institute is trying to sell the commercial property. As a rule of thumb, investigate all the legal liabilities and insurance cover of the commercial property you choose to purchase. Not to mention, transfer of ownership also means the transfer of all the liabilities, issues, and needs of the commercial property to the new owner.

2.     What is the Deal with Tenants?

Being a potential investor, you have to inquire about the current inhabitants of the commercial property you decide to purchase. In this case, adjusting your financial and risk calculations with the commercial property tenants can give you a clearer picture of the deal you are getting. Assess the credit history, lease terms, and other agreement details of the tenants with the existing commercial property owner.

3.     What is the Future Profitability?

It is critical to assess the future prospects of the commercial property to determine how much profit you will make after the purchase and transfer of ownership. The essential background check on the existing owner and current tenants is not enough. Maintain a healthy exposure to the market trends and the project scopes of the surrounding areas. Determine what can and can’t affect the profitability of the commercial property in the future.

4.     What are the Normal Expenditures and Costs?

Ask for a pro forma, if you may. It is a detailed document that shows the costs of running the commercial property currently. A pro forma will show you the current expenses and income information of the commercial property. Hence, you can make an informed decision based on real facts and figures.

5.     What are the Legalities?

Most importantly, you have to assess the legal formalities and the zoning processes of the commercial property you intend to buy. Suppose you want to run a leisure club in the said commercial property after purchase. However, the zoning does not permit the use of said property other than as an office. In such a case, you have to search for other options.

Contact Quinn & Associates, Inc.

Being prepared is key when it comes to making any big decision, and buying a piece of commercial property is no exception. We hope these questions help to guide you in the right direction when it comes time for you to make a decision. If you’re looking for commercial and industrial property for sale or lease on the South Shore of MA, Quinn & Associates, Inc. is here to help! We’re a reliable and trusted company for commercial and industrial real estate. View some of our available listings here.

Contact our experts for excellent guidance and assistance in commercial property purchases. Call us at (508) 588-5600 schedule a meeting with our experts today!