Leasing or purchasing commercial property is a significant business decision that demands careful planning and strategic insight. Whether you’re a first-time buyer or an experienced investor, making the wrong choice can be costly.
To help ensure a successful investment, here are five common mistakes to avoid when leasing or buying commercial property, along with advice on how to sidestep them.
Selecting the incorrect property type
One of the most prevalent mistakes is choosing a property type that doesn’t align with your business’s specific needs. Selecting the wrong type of property can hinder business operations and affect overall efficiency.
Before beginning your search, clearly outline your business requirements. Consider the size, layout, and features your business needs to thrive. Consulting with our experienced commercial property team can help you identify the most suitable property type based on your unique business needs.
Investing in the wrong location
Location plays a crucial role in the success of any commercial property investment. Investing in the wrong location can negatively impact your business, from introducing logistical challenges to a lack of access to key services.
Conduct thorough research into the area, focusing on aspects such as transport accessibility, nearby amenities, and the overall business environment. Proximity to key infrastructure, like major roads or public transport plays a key role in attracting customers and employees. Additionally, consider future development plans in the area to assess how the location may evolve in the coming years.
Allowing emotion to influence your decision
Commercial property decisions should be made based on strategic business needs, rather than emotional impulses. It’s easy to become attached to a space that seems perfect, but emotional attachment can cloud your judgment and lead you to overlook key details.
Approach your property decision with a clear, business-focused mindset – consider whether the space meets both your immediate and long-term business requirements.
Pursuing high-rent properties
In competitive markets, it’s tempting to opt for high-rent properties with the hope that they will yield better business outcomes. While prestigious options can offer benefits, paying premium rents may strain your finances and reduce profitability, particularly for new businesses or those with fluctuating cash flow.
Ensure you have a clear understanding of market rental rates for comparable properties in the the desired location. While premium properties can seem like an attractive leasing option, they must fit within your business’s budget and financial projections. Consider all associated outgoing costs associated with the property as well as any utility costs, to determine the true occupancy cost of the property.
Overlooking future growth potential
Many buyers or tenants focus exclusively on their immediate needs, overlooking the future growth potential of the property. Whether you are purchasing or leasing, it is essential to consider how the space will accommodate your business as it expands.
When evaluating a property, assess its potential for future expansion and adaptability. Consider whether the space can support your business as it grows and whether there are options for extending your lease or modifying the property as your needs evolve.
Broadway Property can provide valuable guidance to help you make objective decisions that align with your business strategy.