Common mistakes when buying Penticton Commercial Real Estate
As Spring quickly approaches, we are excited to help all those interested in purchasing Penticton commercial real estate. After a long winter of organizing for the year, it’s finally time to put some of those plans into action. If one of them happens to be investing in commercial real estate, then we have you covered! However, we want to ensure that you make as few mistakes as possible this year when it comes to buying penticton commercial real estate. So, follow along as we highlight some of the biggest mistakes to avoid as a buyer in 2021.
Here are some mistakes to avoid when investing in Penticton Commercial Real Estate.
1. Failure to plan ahead
Coming in at number one is failure to plan ahead. This is essential in making sure that things run smoothly and without hast. For some this could mean factoring in how your business is going to do while occupying the space, determining an exit plan, and deciding whether the space will offer enough “room” for growth.
2. You don’t have a firm grasp on the property type
It is very crucial in the success of your business that you understand what type of commercial property you are investing in. This can directly affect what operations can be carried out within the space. And, different properties will likely need to be run in different ways. For example, industrial spaces will not be managed in the same sense as retail buildings.
3. You only do surface level due diligence
Possibly one of the most vital steps in your investing process is doing thorough due diligence on your potential property.
This includes but is not limited to; getting the property inspected, determining the risk of investing in that property, evaluating future growth of your company in the area, and becoming very intimate with local zoning.
These are some of the most valuable pieces of information you can have as a buyer before sinking your money into a commercial property.
4. A fixer-upper might not be your best bet.
While an accurately priced property with minimal/cheap repairs could prove to be a great investment, too many repairs will have you swimming in unexpected costs. It’s valuable to find a balance between patching a few things up and reconstruction. This should be something that is determined when the property is inspected.
5. Wrong place, wrong time
Another very common mistake that can drastically affect the price and return on your investment is buying in the wrong cycle. If you find yourself looking to purchase property during the “seller’s market” you will likely not get the most for your money. However, if you buy during the “buyer’s market” then you will be more likely to get a great value for your investment. It is essential that you are familiar with the market before buying into a commercial property.
6. Letting your emotions get the best of you
The purpose of buying a commercial property isn’t the same as buying a residential property. You need to ensure that your emotions don’t interfere with the true value of the space. So be wary of your “love” for the property and refocus your attention to how this investment will affect your business, what the long term costs are going to look like, and how it will add to the growth of your company.
7. Inability to negotiate
You can’t be soft when it comes to negotiation. However, poor negotiation skills often come with a lack of understanding the value of your target property. If you do your research, you are way more likely to be comfortable during the negotiation process. So before starting the bargain, ensure that you are more than familiar with the property you are interested in.
8. You didn’t put any cash aside.
If you are planning on investing in a building especially with other tenants or an industrial property, it is valuable to take some of the money you make and put it aside in order to prepare yourself for a rainy day. Suppose one of your bigger tenants leaves, this will allow things to continue to operate smoothly. Additionally, it can help you with any unexpected repairs or damages to the property in the event something happens.
We hope that these tips give you a few ideas of what to avoid when investing in Penticton commercial real estate in the spring of 2021. By going with someone like me, I can add additional comfort in not making some of these common mistakes. Contact me to start your search for Penticton Commercial Real Estate today!