So you’re ready to purchase a new commercial property for your thriving business? That’s fabulous!
Now it’s time for you to decide if you want a newly-built or previously built commercial property. For this purpose, let’s say you chose a newly built office, custom made to your business’ needs.
But now you have a million questions…
How do you get started? What are your next steps moving forward? Whats the best area for commercial real estate? What does your budget look like? Who’s going to design and do the interior-decorating?
Before you stress yourself out too much, let LINX Commercial Real Estate help you answer four of the most important questions first:
1. How Much Can You Afford?
Like most things in life, we have to make decisions based on finances right?
It’s important to know how much you can really afford to spend on a new building. Not only should you know what you are qualified for, but it’s important to know how it will affect your monthly budget and your business itself.
It’s also good to keep in mind that all pricing you see from the builders’ brochures are “base’ prices and that “standard features” vary from builder to builder.
When thinking of your mortgage limits, be sure to leave room for upgrades that are important to you (flooring, counter tops, and cabinets are the biggest upgrade budget eaters).
A general rule of thumb is to count on spending, at a minimum of at least 10 percent of the base price. Also, keep money aside for the things that will make your office, your office- like window coverings, office furniture and supplies, and landscaping.
Find a good local bank or loan officer and get pre-approved for a loan.
There are a lot of free tools that will give you a pre-approval range, but having a bank get you a pre-approval notice will give you a firm understanding of your price range and down payment requirement.
(Hint: LINX has relationships with all the local banks and loan officers to help you find the best overall rates and terms. (no, we don’t get kickbacks or commissions from them).
That knowledge will go a long way to researching all of your options as to which builder and plans to get serious about.
Keep in mind that there will be closing costs which can range in the thousands (which are never mentioned in the builder’s brochures).
Many people use all of their money as a down payment often forgetting closing cost fees!
2. What is Your Priority – Space or Location?
Armed with accurate financial information you can tackle the next set of questions: What do you want? Bigger offices? More offices? A larger warehouse? A more public location, or less public location?
Perhaps you are wanting to downsize but not down-grade or looking for a secure, “lock and leave” type of place.
Since you are making such a large financial decision that will affect every day of your life and business, take the time to vet all of your options.
Product type, lot size, street-scape, community amenities and the monthly cost of those amenities.
Is proximity to certain areas of town, shopping, and entertainment important to you? These are important pieces of the larger puzzle that is building a new commercial property.
(Hint: LINX will help you sort this out with executive-level research that even the builder will be impressed with. You’ll be armed with knowledge giving you peace of mind.)
3. It’s All About Timing
Do you need to move immediately? Do you have another property to sell? When is your lease up at your current office? Are you growing faster than you intended to and need to move asap?
Keep in mind that the build-time on a new office building can range from 6 months to a year. Should you consider a spec building (buildings that the builder has already started on their own)?
Where are interest rates trending? Is it a “buyer’s market” or a “seller’s market”? Which builders (if any) are offering incentives or discounts?
Will you have built-in equity in your new property? (Hint: LINX will help guide you through the maze and uncertainty of finding the fairest deal on your new-build).
4. An Inspection Is Still Necessary
Chances are that one of the reasons you decided to go with a new-build is the peace of mind that construction defects would not exist.
Protect your investment and your peace of mind with competent, professional and independent inspections.
A newly-built building – no matter the price – is one of the few things left in our economy that is literally built by hand. Factor in a labor shortage among the subcontractors and mistakes and misses will be inevitable.
Trust us – it will happen and it can be intimidating. That’s why it’s important to have an independent, trained set of eyes at the walk-through.
Plan on hiring a certified inspector at around the 10th-month post-closing.
They can give your new building a professional inspection within the warranty period so that the builder can’t claim that you are outside any warranty items that need repair (Hint: As a LINX client this service will be included).
We hope that if you’re looking at buying a new building anywhere in the Southern Utah or Southern Nevada area, you think of the experts at LINX Commercial Real Estate to represent you in your purchase.
We’re realtors who provide guidance in buying from commercial property builders. We’re available from 8:30am to 5 pm Monday through Friday- come on in, or give us a ring!
Call now to see how we can help you (435) 359-4900.