An effective way to bypass fluctuations in the leasing market is by buying commercial property. Depending on your business, estimated growth, and how you’ll use the building, buying retail space might be the right move for you. Take a look at this guide to learn more about the benefits of buying retail space, what to look for in a commercial property, and how a commercial mortgage from Citizens Bank can help you finance your purchase.
Buying retail property is a large investment, but it has the potential to benefit your business in a number of ways, especially if any of the below apply to you:
Buying commercial property provides you the opportunity to have more control over your retail space, build equity over time, increase selling and storage space, and give you more creative license to merchandise your sales floor.
In addition to these immediate benefits, buying retail space could save or even make you money over time. Purchasing a building provides stability and allows you to avoid rent increases, which helps create more accurate business projections. It also gives you more permanence than a lease agreement. These benefits can help decrease your business’ overhead costs. Plus, if you choose to purchase a larger building with a number of available spaces, you could also consider leasing retail spaces to other businesses for an additional source of income.
When assessing the pros and cons of buying commercial property, be sure to estimate the investment of both your financial and scheduling resources. As the property owner, you will now be responsible for property taxes and commercial mortgage payments, as well as repairs, renovations, and tenant concerns. You’ll also need to ensure the space is properly zoned for your business and the businesses of any tenants. Work with a commercial real estate agent to make sure your type of business is permitted to operate in the location you wish to purchase, and that you have all of the proper licenses you need.
Before buying commercial property, it’s also important to consider how the long-term and potentially additional expense of a mortgage loan will impact you. Should anything affect your business’ revenue stream, you need to make sure you’re in a position to continue making payments on your loan. Review your business plan and projections to see if you have the customer base and planned growth to support a new location. Take care not to underestimate potential costs or overestimate profits. If upon review you decide buying retail space would benefit your business, it’s time to start looking for the property that’s right for you.
Because different businesses have different needs, there is no one-size-fits-all approach to buying retail property. Be sure to look for a space that will help your business grow while also serving your customers. Some of the following considerations for a retail property also apply when leasing; however, they’re especially important when you’re looking to make a more permanent business investment like buying a retail space:
We are committed to helping your business succeed. Our dedicated business banking professionals can help you find the right product to meet your business’ needs. To learn more about our business loans, please call 1-800-428-7463, visit us online, or visit your nearest Citizens Bank Branch.
Disclaimer: Views expressed may not necessarily reflect those of Citizens Bank. The information contained herein is for informational purposes only as a service to the public, and is not legal advice or a substitute for legal counsel, nor does it constitute advertising or a solicitation. You should do your own research and/or contact your own legal or tax advisor for assistance with questions you may have on the information contained herein.