Purchasing a small commercial building has very little in common with buying a home in Denver. In fact, even when purchasing another residential property for investment purposes, the rules on what to look for are completely different.
Unfortunately, too many people learn this the hard way, when they are already several hundreds of thousands of dollars — if not millions — in debt. To ensure this doesn’t happen to you, use a buying commercial real estate checklist to ensure you ask all the right questions before diving in.
Is There Consistent Demand in the Market?
Before buying commercial property in Denver, you need to know you will receive a steady return on your investment. Look for areas that will give you consistent demand. Consistent demand also comes down to how well competitors may be satisfying the needs of your potential customers.
Remember that saturation drives the market price downward.
Is the Location of the Property Ideal for Your Plans?
Location is one of the biggest factors affecting consistent demand. Even when the market is saturated, having one of the best locations instantly puts you at the top of the list. The location also affects other key aspects for any business, such as visibility, demographics served, and ease of access.
Does the Property Fit with Your Life Goals?
For example, because of the much higher turnover rates, a hotel requires far more hands-on work than leasing commercial space in a plaza to a dentist. Ensure the level of involvement complements the time you have on hand and your management preferences.
Do Zoning Laws Allow for Your Proposed Development?
Zoning laws in Denver decide what you can build on the land you buy. If you already own developed property, then it determines what you can do with that property. Always verify with the relevant city or county regarding the permitted uses of your property.
It is sometimes possible to rezone, but not always. If you cannot and it is not properly zoned, you need to know this before purchasing.
What Are the Exact Property Lines for Your Land?
When buying land in Denver, many owners-to-be are surprised to find that the seller has no idea where the property lines are. Ensure that the owner provides an up-to-date survey to show if either private or government entities built on or use the land.
You will need to know of any easements granted and any other conditions that may affect your full and independent use of the property.
Do You Have a Good Exit Strategy for Your Business?
Almost every business owner focuses on their entry strategy. How do they get into the market and how much will it cost them? However, not all markets remain profitable in an area forever.
Proactive commercial real estate investors study the market to know when it is time to exit and set up business somewhere else or branch into a new niche. Know what criteria keeps you in the market and what should send you packing.
Are you ready to begin your commercial real estate investment journey? Our team at Unique Properties can help to point you in the right direction. We also provide services related to acquisitions, leasing, and property management. Contact us today for more information.
Image Credit: Getty Images / fizkes
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