Tips for Buying Industrial Real Estate
Industrial real estate is a valuable and unique sector of the commercial industry. Since it can typically handle and remain steadfast during market fluctuations, and the turnover rates are low, industrial real estate offers promising ROI. Industrial real estate is also flexible when it comes to zoning, space use and other factors. With all of these characteristics, it’s no wonder you may consider buying an industrial property. Follow these three tips for buying industrial real estate to have a stress-free buying process.
Determine a Plan of Action
With any purchase or investment, you want to be sure to do your research and develop an overall plan before you begin the searching and buying processes. The most important first step is determining your budget. Understanding exactly how much you are willing to spend can narrow your search. Next, determine how much space you need and what you will be doing that space. Are you purchasing an industrial real estate property for your business or do you plan on leasing it out to tenants? Will you need a loading dock and an office area? These are all factors to consider and will determine what type of industrial real estate you need and how much space you’ll be looking for.
Understand the Property
So, you’ve finally established your action plan, mapped out your needs and you’ve found the perfect industrial real estate property! Now what? Understanding all aspects of the property is crucial to getting the highest ROI possible. Ask the current owner why they are selling the property. The answer will give you a better understanding of how well the property aligns with your plan which could be beneficial for negotiation. With any purchase or investment there is almost always a risk. It’s inevitable. Learning about any kind of necessary repairs, issues, future costs, other factors of the building and land is also imperative to the purchase process. Other aspects of the property to consider are the zoning laws. Zoning laws essentially inform the owner of allowable uses for the property. Therefore, you should fully understand the zoning laws that apply to the industrial real estate property you are looking to buy. Be sure you are very thorough in understanding and evaluating the property. In regards to property evaluation, we recommend hiring CRE professionals so you don’t miss anything that could negatively impact your purchase. Often times, a bad investment is the result of carelessness and lack of attention to detail.
Get an Expert Opinion
As you can see, there are many factors to consider when purchasing industrial real estate which may seem overwhelming. This is where a commercial real estate professional who specializes in industrial real estate comes in handy! Unless you are a highly knowledgeable and trained industrial investor, there are probably some attributes that go unnoticed, which could result in a large loss of money for you. No matter where you are, hiring a commercial real estate advisor that specializes in industrial real estate is the smartest move you can make. SVN has advisors nationwide that are specifically trained and educated in the industrial sector of the commercial real estate industry and always keep client well-being as their top priority. Moral of the story; get an expert opinion. Find a CRE professional who knows the market and can help you develop a plan, locate properties and negotiate a deal. Allowing a professional to handle the process will ensure fewer headaches, less money wasted and increase overall buying experience.
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In conclusion, the industrial real estate aspect of CRE is very unique and the process of buying/investing can be complex. When buying an industrial real estate property, be sure to determine your plan of action and completely understand the property. Also, make sure to hire a commercial real estate professional in order to maximize profitability and have a smooth overall process. I hope these tips will help you in your future industrial real estate endeavors and we would love to hear your thoughts in the comments section!
About Us – The team at SVN | Graham, Langlois & Legendre has over 99-years of combined experience helping clients across the Baton Rouge market get the most value out of their CRE investment. Contact one of our dedicated CRE professionals today with any questions you may have and start seeing the returns in a market that will make sure to give today, tomorrow and for the extended future. To reach us, you can call us at 225.367.1515 or you can send us a message on our website. You can also follow us on Twitter at @svngll or on Facebook.