Smart Tips for Buying and Selling Commercial Properties

When it comes to your investments in commercial property, you should always be as calculated and profit/return-focused as possible.

You didn’t invest or haven’t planned on investing in a commercial property to make losses after all, and so being smart about your contracts and movements in commercial property is essential. 

We know that the world of commercial real estate isn’t as clear and straightforward as we’d like it to be and that in mind, there are a few avenues you’ll want to go down to ensure your success in making a great return. A few of these avenues include engaging lawyers, undertaking thorough property assessments and more. 

In this article, we’ll take a look at a few smart tips for buying and selling commercial properties and what you can do to get the most out of your investment. 

Always Consider Your Options

For the investors looking to make their first leap into buying and selling commercial properties, our biggest tip for you is to always consider every option available to you. 

What we mean by this is looking beyond simple retail storefront properties and understanding that there is a myriad of different high-return commercial properties on offer that don’t rely on retail, office or small business tenants. 

For example, consider the shared working spaces, unique inside-mall commercial spaces for cafes and barbers and other commercial investment avenues. These are often higher-earning in that they are bound to the larger stores or malls they’re operated within and can offer a more stable investment. 

Think of your in-Myer or in-David Jones cafes and barbers, for example. 

To add to this, our investor readers with an already-developed portfolio, you may want to consider diving into other types of commercial property that diversify your property portfolio.  

Speak with Commercial Contract Lawyers

Our second significant tip here is to forgo making any moves without speaking with a contract lawyer first. 

This goes for both newbie and seasoned investors. 

You’ll always want to make sure you have a professional to look over your paperwork prior to making investment decisions when both buying, selling and leasing commercial property as these lawyers will let you know if there are any loopholes or missing information — as well as if there is the risk for severe losses. 

LegalVision NZ Contract Lawyers, for example, will provide deep insight into whether your contract is comprehensive and covers all required information, or if there’s something missing — when both buying or selling. 

Understand the Market Prior to Investing

One key point we’d like to make is that you may want to consider the market’s standing before you invest in commercial property. 

Given that a good portion of the world’s businesses are still reeling or actively affected by COVID-19 there may be some types of business properties or commercial spaces that aren’t in high demand. 

This presents both an opportunity and a risk. 

You may find walk-in spaces, cafe-friendly and retail spaces becoming incredibly affordable to buy. Though, when it comes to finding tenants, the COVID-19 impact may make things a lot harder. 

That in mind, weigh up your risks and determine whether you’re able to use these lower costs to your advantage. You may not even need to find a tenant if you buy a commercial property at a low enough price and resell when the market stabilises following the pandemic to recuperate loan costs. 

Offering Flexibility in Times of Uncertainty

Another key tip to keep in mind is that we are currently operating in a somewhat ‘strange’ time for businesses. 

That in mind, if you’re looking to buy-to-lease a commercial property, businesses are now looking for more flexibility and lenience than ever before — and so you should offer this. A business will be more willing to sign a lease with you if they know you have their back when it comes to subsequent lockdown measures, for example. 

With that noted, if you’re investing to lease a property, these flexible terms may make finding a tenant and offsetting your loan expenses a lot easier and considerably reduce the monthly cost of a property as fast as possible.

To add, flexibility is also a key deciding factor for high-growth and start-up businesses  too, in that the CEOs of these businesses are going to want the assurance that if they outgrow the space, they’re free to leave and expand elsewhere. 

Investing in In-demand Commercial Spaces

Our final tip when it comes to intelligently investing in commercial property is understanding what current demands are from tenants across your city. 

This will mean digging into information such as: 

  • What do tenants currently need from their spaces?
  • Where are the high-growth locations in your city?
  • Are there growing sectors looking for a specific type of space?
  • Will your investment goals and your tenant’s goals sync up?
  • What are your minimum leasing price and term?

Some of these points in mind, you’ll be better able to find and invest in commercial space that will remain in demand and offer a good return in the shortest amount of time. 

Think of this task like marketing — the more you know about your ideal tenant, the better you can invest in property or design commercial property to suit their needs best, and subsequently earn the highest returns. 

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