When you're in the market for commercial real estate in Colorado, be sure you take your time and do your research in advance. Below are four things to keep in mind while you look for the perfect property.
1. Create a realistic forecast. What do you expect to earn in the next year, in the next five years, or in the next ten years? Make sure you consider everything that goes along with income, such as expenses, taxes, operating costs and the like.
2. Do your due diligence when inspecting any property. You don't want to move too quickly, even if a piece of property seems like a good deal, and overlook warning signs. If there are issues with the property, they could halt your business' production entirely, which cuts into your earnings. That good deal won't look as good when these issues crop up.
3. Consider what you're allowed to use the property for. At the very base level, this means looking into zoning laws. Be sure you look at local ordinances and regulations that you have to follow, as well, such as rules about closing times or allowable external materials for renovations.
4. Know what paperwork you're going to need to get your loan. You typically need more for commercial properties than residential ones, as the lender will want to know what you've earned in the past, what expenses you have, what your projections look like in the future, and much more. You need more paperwork for final approval than a pre-approval letter.
Don't let the complexity of commercial real estate hold you back. Just be sure you know about everything you need to do, including the legal steps that must be taken.
Source: Union Bank, "Six things you need to know before buying commercial real estate," accessed Feb. 23, 2016