You know that business is booming when you find the need to rent or buy another property for your business. You might need another warehouse to store more of your inventories. There might be a need for another office to serve your growing client base in another city or state. You might even need to move to a bigger location to expand your business. No matter your reason for needing another property for your brand, there are a few things worth considering.
Your decision goes beyond knowing why you need a new property, where your preferred location is, and what the legal considerations are. The following dos and don’ts will help you achieve better results when making a real estate investment as an entrepreneur:
Consider Buying or Leasing
Entrepreneurs always have the option to lease or buy real estate for their brand. This is especially true when you have enough funds to make the purchase. But then, just because you can afford a purchase already meant this is the best choice.
Leasing is a good choice if you could use more cash on hand to fund other investments. This could mean buying a few pieces of equipment for your business or hiring a local agency to have your business professionally. If you have no plans on keeping and maintaining the property for the long term, then it makes sense to rent instead.
Buying a property for your business allows you to decide whatever you want to do with the place. You get to benefit from the property’s depreciation. You can even enjoy some tax benefits depending on the location.
Businesses investing in a property in the UK, for instance, can check which expenses they can deduct on their taxes. You can even consult a pro to check if you are eligible for enhanced capital allowances. Note that this tax allowance also applies to assets you buy like machinery or equipment for your business.
Buying a property means you will be in charge of everything around the building, including the maintenance and repair. There is a need to find affordable financing for the purchase. Weighing which options would work best for your brand makes sense for both your current business needs and financial situation.
Don’t Invest Without Expert Help
You may be able to buy a property that you think will suit all of your requirements. But then, there are experts you can hire to help you make the process a lot easier. Different professionals can offer expert services so you can focus on your business while they find the right property for you.
A real estate broker, for instance, can help you find potential properties, even off-market properties that can match your needs and your budget. A mortgage broker can offer you a mortgage when buying a property. A real estate lawyer, on the other hand, can negotiate the transaction for you.
An accountant is another professional that can help you when making an investment property decision. They can help you see how much your business can afford to rent or buy. They will make sure you don’t miss any tax benefits during the process.
Do Find Other Ways to Make Your Property Work for You
Let’s say you bought a commercial building as your brand’s next business location. It pays to find other ways to make money out of your next investment if you have no need and intention to occupy all space. This way, you can start diversifying your investments by owning a business and tapping on real estate investing.
For example, you can start taking other small businesses as tenants within your building. This will diversify the services offered in the property, thus increasing foot traffic. You get to be a landlord, gain extra revenue from your tenants, and reduce your overall costs.
You can also lease your space for advertising. Many other businesses would pay just, so they can place their signage and billboards in ideal locations. If you have tenants, selling ad space is another way to make extra cash.
Don’t forget that your property has the potential to increase in value over time. The typical investment potential is 6% to 12% yearly. In case you decide to sell it in the future, you can boost its resale value if you can keep it in tip-top shape.
There can be different reasons why you might need to invest in real estate for your brand. No matter what your reasons are, know that this is a big decision to make. You don’t want to make mistakes that can potentially hurt your brand’s financial future. Keeping these dos and don’ts in mind can help you make the best property investment decision for your business.