Dear Property Manager,
I have been considering purchasing a building for my web development business. Currently we rent our space, but it seems like a good time to buy and stop having to pay rent, and maybe rent out a little space and make some money as well.
Would this be a good decision? I don’t know anything about commercial real estate in the Boone area where we are now.
Chris K. Boone, NC
Many people have wondered if owning their own business location would be a good idea. The answer depends a lot on your business and financial situation, and also on your willingness to handle the responsibilities of property ownership in addition to running your business. Interest rates at near historic lows, and property costs also low, creating an opportunity for savvy entrepreneurs.
Owning your commercial property location does offer many benefits. As you pay each mortgage payment, you'll build equity –instead of having it go to rent you will never get back. And if the property value appreciates, you could make a significant amount of money when you go to sell. Since you will be the landlord, you will have control over the space – giving you the freedom to do any build-outs you wish, paint the walls purple to match your company logo, or add an employee’s lounge/patio out back! You could even decide to lease un-used space to tenants, creating an additional revenue stream.
Additionally, as the owner of your commercial property, you can make maintenance repairs on your own schedule and you won’t have to worry about rent going up next year, and the year after!
To buy your property you will probably need 20% of the value in cash. If there are tenants already in the space, you will need copies of their signed leased for the lender, and insurance against damage or loss. You will also want to consult your attorney and accountant before making any decisions. There are serious financial, legal and tax implications associated with commercial property ownership.Before finalizing your decision to buy, consider your cash situation, not only for the down payment and the mortgage payments, but for any needed repairs, maintenance or upgrades that will need to be done. Also consider what you will do if your own business outgrows the space: Will you be able to rent it and move into a bigger building? Is the location a good one for future tenants?
It is a buyer’s market, and no might be a great time to buy your commercial property. But before you take that leap, weigh all the pros and cons, and make the best decision for you and your business.
If you would like more information about the available commercial properties in Boone, or learn about property management services, please call our Boone, NC office at 803.578.7725.