Factors You Cannot Ignore When Buying Commercial Property

Buying commercial property from where to run your business can be one of the best decisions you make especially on costs. It is a much better choice cost wise compared to properties on lease or rentals that can be quite pricey. It is however important to remember that commercial real estate carries more risks compared to buying residential property hence you need to do your research thorough and run a complete analysis before making the final choice and going through with the buying process. Below are some of the factors you should never ignore when hunting for commercial property for your business.

The location

This is very tricky because no one can predict what will happen in the future. The location that looks lucrative today may not be the same tomorrow and you need to tread very carefully for the sake of the business. Consider trends of past businesses in the same area even if you are targeting a new property. You also must evaluate the location in relation to your suppliers and end users Accessibility, not just for you but also for the end users is very important just as is connectivity. Never jump onto a property you like without seriously considering its location.

Modification restrictions

There may be property laws applicable to restrict modification or the property interior or exteriors and you need to be completely aware of this when buying. Start by knowing what your business requirements are the look and the laws and study them well to find out what is allow and what is not allowed legally. It is also important to remember that you may have some maintenance costs to deal with and you are better off being aware of this beforehand.

Support services

They are what will help in the smooth running for your business and in the end will impact on the resale value when the time to sell comes or rental value for that matter. These services include security, lift and parking among others and you should look into them before finalizing your deal on the commercial property. Find out what services are most important for the business and choose accordingly. A property that comes with them all will save you costs of putting what you need in place.

The neighborhood

Apart from having the potential for business growth, the neighborhood should have basic utilities available. You really cannot run your business well without proper drainage, water and electricity. It also helps to look at the infrastructure development within the area because such can impact on your business positively and also negatively. Such developments will impact property value too in the future. For instance a railway construction can bring in accessibility to your business but then again you may have to keep up with lots of disruptions every time the train passes by. Find out what impact the developments around the property will directly have on your business and be open to other possibilities too.

Commercial and Residential Real Estate in NCR

Commercial Property

Commercial Property consists of any property which can be used for commercial purposes which generate income such as retail shops, office spaces, food courts, cineplex, parking structures, conference plazas, warehouses, factories, IT Data Centres, & other shops. They are different from property that may be used for residential or agricultural purposes that although may generate income, are primarily developed for personal, not industrial or commercial use.

From an investment point of view, there are several advantages of investing in a commercial property than a residential property in India. They include:

Commercial properties are generally developed after a lot of research. The developer takes into account things like cost of land acquisition, construction and other costs to derive their profit margins. The property is thus generally at a location that is easily accessible and well connected, amid a catchment area with few competing projects.
It is easier to lease commercial property for longer duration to corporates creating stable, assured rental income for life.
A large office space can be divided into smaller sections if need be, ensuring financial viability of the investment.
Property management in commercial properties can be managed by professionals and be paid by tenants ensuring reduced stress for the investor as compared to a commercial property.
The return on investment on a commercial property is generally between 9-21%, while for most residential property investments the returns are 1-3%.

Speaking specifically about the Real Estate Sector in the National Capital Region, the residential property rates are stuck at the 2013-2014 levels. There is massive inventory with the developers with some reports suggesting it might take over 4 years for the inventory to clear.

The commercial property sector meanwhile is faring much better with prices up nearly 45% from 2013 levels and vacancy rate below 5% in many micro pockets in Gurgaon. The demand of office space from corporates, ITeS, and retail are the key drivers of this phenomenon.

Residential Property

Residential property is should be the property one buys for their own personal needs. Various types of residential properties include Villas, Apartments, Luxury Condominiums, Bungalows, or plots of land which one plans to develop later. Generally, a person buys residential property only once or twice in their lifetime. Hence one should take their time researching about the property and do so with a clear picture of their current and future requirements in their minds.

Some requirements of residential property are:

It should be in a residential area. Buying a residential property in a commercial area makes little sense as one would be constantly disturbed by noises of vehicles coming and departing, of factory activity, and other commercial activities. From a security point of view too, a commercial area has a large floating population which is difficult to monitor.
It should be free from all claims and liens. Buying a property without doing due diligence is asking for trouble. At any point someone may stake a claim or raise objections which may take years to settle later and cost a fortune in legal fees.
It should be a quality construction. If buying built up property it is essential to check the builders previous projects and have an independent inspection of the property from professionals to assess quake resistance and take ample measures to prevent water seepage from cracks and joints.
It should be close to amenities. A recent research has found that most of the house buyers are young couples as their parents already have a house of their own. Independent nuclear families who plan to have children in the future and a big thing to plan for in India is the school where the children will go to. In fact people give more weightage to having a good school nearby than to markets, religious places, and even hospitals.
Other things to look for are the price of the property, law and order condition of the area, water and electricity supply to the property, & distance from work among others.

So we see that the two different types of properties cater to different people with their own needs. While the commercial property is bought with an aim to invest & perhaps either rent or sell later, a residential property is bought primarily for self. In both cases it is important to identify the needs or the reason for buying the property, doing due diligence, partnering with the right developer who is honest, has the expertise, and understanding of the local market to get you the best possible deal.

Choosing a Restaurant Space for Lease

Starting a restaurant in a rented space can be a great way to begin your retail investment. While buying or building a property outright might give you more immediate control over the aesthetic and function of the space, it’s costly-and working with an existing building and owner can have its own rewards. You’ll likely have far less paperwork to worry about, and a rental agreement can grant you access to valuable commercial areas that it would be unrealistic to buy into. If you’re searching for that perfect location, here are a few key aspects of the process to consider:

Make sure you’re making the legal side of things easy for yourself. You’re making a considerable investment, and there are resources in place to help you make smart choices. Make sure you are rigorous in ensuring that the property will be easy to maintain in accordance with health codes, and consider recruiting legal help when it’s time to sign the paperwork. The US Small Business Administration has a wealth of information on the restaurant space for lease process, and your local office may be able to provide information specific to your area. Know what sort of agreement you’re getting into, and know what legal recourse you have if anything should start to go wrong.

Be realistic about where you’re at now, but plan ahead. Starting a restaurant can be a lucrative investment, but it’s important to stay determined about what you can afford and what your basic needs are. What kind of parking is available? Will you have enough storage areas? How much can you afford to pay for a great month? A lousy one? Ideally, you’ll be able to identify a restaurant space for lease that can modestly accommodate your current operation, but with at least a little possibility for growth over the next few years.

Making the most of one’s investment in a restaurant space for lease demands that owners consider how the venue’s inherent qualities align with the needs of their businesses. Consider how the ambiance of the street you’re located on, the architecture of your building, and the culture of the neighborhood you’re planning on setting up shop in can result in unique creative challenges and solutions. Going into the property search with a clear idea of what your needs are is important, but it’s just as critical to maintain an open mind as new opportunities present themselves. The history of an older property might inspire a whole new idea for a theme for your establishment. The most successful ventures will combine the owner’s unique vision with the realities of what’s at hand-so take control of the creative chaos for the better!