Commercial property is an essential investment for any business. Buying a property to house your business can be a complex process, so it’s vital to do your research and work with a qualified professional.
Understanding the process of purchasing a commercial property is essential before making your decision. Many business owners find the process overwhelming, but it doesn’t have to be.
Here are a few steps to take when purchasing a commercial property:
1. Decide what type of property you need
Before you start shopping for a property, you must decide what type of property you need. There are many commercial properties, from office buildings to retail storefronts. You must determine what kind of property best suits your business’s needs.
Depending on your business, you may need a property zoned for commercial use. Zoning restrictions can vary from city to city, so you must check with your local city government to see what types of businesses are allowed in each zone.
2. Set a budget
Of course, your budget will play a significant role in your decision to purchase a commercial property. You need to set a realistic budget for your purchase. Keep in mind that you will likely need to renovate the property, so your budget should account for these costs.
Many business owners choose to finance their purchases with a commercial mortgage. If you decide to go this route, compare interest rates and terms from multiple lenders to get the best deal. You can also use a commercial mortgage calculator to estimate your monthly payments.
A realistic budget should also include the costs of hiring a professional to help you with the purchase, such as a real estate agent or lawyer.
3. Find a qualified real estate agent and lawyer
Unless you are an experienced commercial real estate investor, it’s a good idea to hire a professional to help you with the purchase. A qualified real estate agent will be familiar with the commercial real estate market and can help you find properties that fit your budget and needs. They will also be able to negotiate on your behalf and help you navigate the paperwork.
You should also hire a lawyer to assist with the purchase. An expert conveyancing solicitor will be able to review the contract of sale and ensure that all the legal requirements are met. Some even offer a no-sale, no-fee guarantee. If you plan to finance your purchase with a mortgage, your lender may also require you to have a lawyer on your team.
4. Get a commercial property valuation
Before making an offer on a property, you should get a commercial property valuation. A professional valuer will be able to assess the value of the property and provide you with a report. This report will help negotiate the purchase price.
A commercial property valuation will consider several factors, including the property’s location, condition, and recent sales data. Some valuers may also consider the potential rental income of the property. If you plan to finance your purchase with a mortgage, the lender will also require a property valuation.
5. Compare properties and make an offer
Once you’ve found a few properties that meet your needs, it’s time to compare them. Consider factors such as the location, condition of the property, and price. Some people also choose to hire a professional inspector to assess the state of the property before making an offer.
Once you’ve chosen the perfect property, it’s time to make an offer. Your real estate agent will help you negotiate the purchase price and prepare the contract of sale. Be sure to have your lawyer review the contract before you sign it. Never sign a contract that you don’t understand or that contains errors.
6. Complete the purchase
If you’re financing your purchase with a mortgage, you will need to arrange for the loan to be approved. This process can take several weeks, so be sure to factor this into your timeline. Once the loan is approved, you must sign the mortgage documents and pay any associated fees.
Completing the purchase will also require you to pay stamp duty. This tax is levied on the purchase of property in most Australian states and territories. The cost of stamp duty to pay will depend on the purchase price and the state or territory in which the property is located.
Once all the necessary documents have been signed, and the fees have been paid, the seller will officially transfer the property into your name. Congratulations! You are now the owner of a commercial property.
Purchasing a commercial property can be complex, but it doesn’t have to be daunting. By following these steps, you can make sure that you find the perfect property and avoid any stressful surprises. Remember to seek professional help when necessary and to have all the documents reviewed by a lawyer before you sign them.
