When you've finally amassed enough in your savings that you want to dabble in real estate investments, you might want to buy a commercial real estate property. Whether you purchase a small multi-family apartment building or an office building, it's not quite the same as buying a house for yourself. Knowing the details that follow can make you a more prepared buyer.
Local Zoning Information
You should be interested in finding out as much as you're able about the zoning of a property you want to buy. You may assume that it's in a business district, but depending on the town or city, that could mean different things. You need to visit the zoning office yourself and get a copy of the ordinance that pertains to the property so you can read it yourself. There will be guidelines regarding permitted usage of the property, but it will also contain rules about fences, parking, and other things you might not immediately think of.
Once you've had a chance to read over the zoning information, you might make a different decision about whether you're interested in buying the property or not. If your heart is set on the location and the property, you might ask the office about your chances for a variance, which would allow you to make any improvements you need that aren't contained in the zoning ordinance.
Another thing you should find out about is the current fire code and whether a property you're interested in is compliant with it. This is particularly important for multi-family properties that might have been constructed years ago and are compliant with past codes, but no one has investigated them since they were built. You may need to pay fines or upgrade the property, which is essential knowledge before you actually purchase it.
You and your real estate attorney should look through all the current leases before buying a commercial piece of property. How many tenants are paying late? How many tenants plan to renew? It's important that you know how many new tenants you'll have to find once you take over and how many late-paying tenants you may need to evict after some time. You may dislike some of the terms in the current leases and need to draw up new documents for the tenants going forward.
These are just a few of the issues you'll deal with as the owner of a local commercial property. For expert help choosing a suitable building for your budget and needs, discuss this with a real estate broker who understands these properties.