Are you thinking about purchasing a commercial property? Although this is a big decision, it can be well worth the time, effort, and money spent. How do you know if buying commercial property is right for you and your business? Here are three questions to ask yourself before buying commercial real estate.

1. Do You Know Your Financing Options?

Because the commercial property can be a large investment, you’ll likely be getting a real estate financing loan. Fortunately, there are many loans to choose from such as SBA loans or term loans. However, you qualify for different loans depending on your situation. If you’re planning to rent areas of your property to other tenants, you may not qualify for certain loans.

Because there is so much paperwork required to get a loan, it’s a good idea to work with financial professionals to walk you through the process. They can help you determine which loans would work best for you, what work is required to get the loan, and what you need to do to get started. Keep in mind that lenders will want to see your list of assets, tax returns, and other documents that prove your reliability as a loanee.

2. Do You Have a Good Location?

Whether you are looking at a property for your office, store, or any type of commercial building, it’s important to pick an optimal location for business. Is it in a place that customers can get to? Is it in a location that makes sense for the type of commercial property (i.e. self-storage, restaurant)? Have you done your research on the demographics of the location and is it worth purchasing? Location is everything, so this should be a big part of the decision-making process. 

3. Does It Make Sense?

You may see great potential in buying commercial real estate, but it’s important to think through your plan. What are you planning to do with the building in 5 years? In 10 years? Owning property means having responsibility. With a few goals, you can invest in a way that helps you get a return once you choose to sell. You can also rent out to tenants, which is normally a little less chaotic than renting residential properties.

Purchasing commercial property can be a great investment. Although it takes time and effort, your business can benefit greatly from it. Make sure you ask yourself these questions and make a plan to ensure your success as a property owner.