Perspective
At some point in a business’s life, the owner will think, “I’m tired of paying rent. Maybe I should buy a building.” At what point should an owner consider that idea?
If it’s a start up business, it’s never a good idea to buy. A new business needs capital to build their products, buy inventory for their new store, or buy desks for their office. There is always a ramp-up period for any new business owner. Very few come out of the box making money. In the beginning, keep your capital and make sure you can get your business up and running.
That question is so critical to any business owner. It can help their business grow to be more profitable, or it can have the opposite effect (which is what we want to stay away from).
It used to be that most real estate location decisions were made based upon where the owner lived. However, there is a lot more to this important decision than that.
Many times over the last 30 years I have been asked “Can I get a 30-year fixed rate loan for a commercial building like I can when I buy a house?” No, you can’t, and that is just the beginning of the differences when it comes to buying commercial real estate.
Most people understand that when you buy a house you should hire a buyer’s agent to represent you and when you sell a house, you should hire a seller’s agent. Unfortunately, people don’t quite understand that concept in commercial real estate. When business owners outgrow their space or find a need to move, get in their car and drive around in the area of town that they want to be in. They call on the signs, hoping to catch the agent for the building (which rarely happens). So, they leave a message for the agent to call them back (which sometimes happens). It’s not a very efficient use of their time or energy.