So you are thinking about renting or buying a commercial property. Whether you are starting a business for the first time or relocating your existing business, there’s a lot to consider when it comes to commercial real estate.
66 Questions to ask when considering a commercial property:
- How much space does your business need?
- What type of location is best for your business?
- What type of property are you looking for?
- What is included in the rental price?
- Are there any restrictions on the use of the property?
- What is the square footage of the property?
- What is the age of the property?
- How many floors does the building have?
- How is the property zoned?
- What is the condition of the building?
- How old is the roof?
- What is the historical occupancy rate of the property?
- What is the current rent roll for the property?
- How often have rents been increased in recent years?
- What is the condition of the common areas and the individual units?
- Have any major capital improvements been made to the property in recent years?
- What are the lease terms?
- What is included in the lease?
- Are there any common areas that are part of the property?
- How many parking spaces are available?
- What is the exterior condition of the building?
- What is the condition of the building’s interior?
- Have any renovations been made recently?
- Who pays for utilities?
- What kind of security does the building have?
- What type of heating and cooling system does the building have?
- What is the condition of the plumbing?
- What is the condition of the electrical system?
- How much will it cost to maintain the property?
- How much will it cost to heat and cool the property?
- Are there any environmental issues with the property?
- What is included in the sale (e.g. furniture, fixtures, equipment)?
- What are the rental costs for the space in the building?
- What is the vacancy rate of the building?
- What will be the estimated taxes on the property?
- What is the insurance rate for the property?
- Who are the current tenants of the building?
- How long do leases in the area typically run?
- Are there any restrictions on the use of the property?
- How is the rent calculated?
- When is the rent due?
- Are there any additional fees for the property?
- How much will it cost to make necessary repairs/updates to the property?
- When was the last time major repairs were made to the property?
- Is there a maintenance staff responsible for the upkeep of common areas?
- What type of insurance is required for this type of property?
- Who is responsible for maintenance and repairs?
- What type of signage is allowed?
- Is the property in a flood zone?
- Is the property in a seismic zone?
- Is the property in a high-wind zone?
- What are the local zoning regulations?
- What is the crime rate in the area?
- Are there any special assessments?
- How close is public transportation?
- What kind of businesses are there nearby?
- What are the demographics of the area?
- How good is cell phone reception in the area?
- Is there an HOA or BID?
- Has the owner considered any offers on the property?
- What are the owner’s bottom line terms for selling the property?
- Is the property encumbered by a loan or mortgage?
- If so, how much is owed on the loan or mortgage?
- Is there a lien on the property?
- What happens if you’re late on rent?
- Who do you contact if there is a problem with the property?
Frequently Asked Questions
Can you negotiate the rent for a commercial property?
Commercial landlords usually charge a higher rent than owners who rent residential space to tenants. However, it is worth asking the landlord if they would be willing to negotiate the price. Sometimes the owner of the property has already set a lower price than what they would be willing to accept. If the asking price is too high, be prepared to offer a lower price or suggest other terms, such as a longer lease.
What are the disadvantages of commercial property?
Commercial property is disadvantageous in several ways. For one, it can be difficult to find a tenant for a space that is not being used. Also, the owner of the space may have to pay taxes and other fees that residential properties do not. Finally, maintaining and managing a commercial property can be more time-consuming and expensive than managing a residential property.
What is an important factor for commercial properties?
An important factor for commercial properties is their location. Properties in prime areas with good visibility and high traffic can usually command a higher rent rate than those that are not. Another factor landlords often consider is the potential for future development in the area. If they believe the surrounding area is growing and will continue to grow, this can increase the value of their property.
Conclusion
Before signing a commercial lease agreement, be sure to ask these questions! Answering these questions will help you avoid potential problems and ensure the property meets all of your specific business needs.
