Business owners often dream of owning their own location, with room to grow and the freedom to have their space reflect their corporate brand and vision. For other companies, a new property might mean opening a second location or a chance to upgrade to a larger space.
In any case, buying a commercial property involves more than just a good location and the financing to pay for it – it also requires lots of detailed research. Learn four factors your business should consider before buying a new or additional commercial property.
Existing Risk Factors
Finding your dream commercial property is great, but it's important to consider any existing risk factors before you sign on a dotted line. For example, you should research some of the following risks to your potential new property:
• Crime rates
• Flood maps and flood history
• Future roadway construction
• Building renovations
• Environmental or wildlife concerns
All of these issues can lead to future issues with theft, property damage, revenue loss, or high costs related to renovations or construction issues. You don't want to commit to a new commercial lot only to find out that crime is high in the area, has major renovations and upgrades needed, or is very prone to flood damage.
Understanding and researching risks in advance can help you determine if your property really is a smart investment or if the risks outweigh the rewards.
Local Taxes and Ordinances
Your existing business might be in a location that is supportive of local businesses and offers favorable conditions for business owners. However, some businesses might open up a new or second location in a different area only to find that they're constrained by very strict zoning ordinances or subject to much higher business taxes.
By not doing your due diligence, you could discover far too late that your new commercial property isn't allowed to have business signs larger than a certain size, is limited to certain colors and building décor, or has much higher taxes imposed by local tax offices. Make sure your new location is a place where your business has the opportunity to thrive without being restricted or hindered.
Current and Future Neighbors
Another important factor to consider for a new or additional business property is what else is coming to that region. It's essential to do your homework to find out if your restaurant will have lots of competition coming soon, a future development that could block your retail store from street view, or a neighboring business that could tank your property value such as a landfill or manufacturing plant.
Doing early research before committing to a commercial property purchase can mean the difference between a smart property investment, or a property that will struggle to gain and keep customers. Make sure future developments will be projects that boost your bottom line and provide a long-term source of customers and foot traffic.
Utility and Insurance Changes
Finally, it's important to consider the day-to-day costs involved in purchasing a commercial property, specifically the utilities and insurance costs needed to operate your business. Moving to a new location or opening up an expansion site could mean your business doesn't have as many utility providers, meaning less competition and higher utility costs.
It's also essential to discuss with your Commercial Insurance provider what impacts a new or second location will have on your commercial insurance premiums, and how risk factors such as flood zones or crime might have on your annual insurance costs.
Aegis Can Help Identify Risk Factors
Aegis Insurance & Financial Services is a leading provider of top-quality Commercial Insurance solutions that help companies get the financial protection they need when it matters most. Our team of expert Commercial Agents can help guide you through the process of evaluating your potential property and identify risk factors that can impact your business and insurance costs.
Contact Aegis today to learn more about our full range of Commercial Insurance policies and how they can help protect your existing or new commercial property. You can speak to our Commercial Agents at 713-850-7622 or fill out our online form to request a free quote.