Buying a commercial property can be a great investment opportunity for many people, but if you’re a first time buyer, you might be wondering whether you can buy a commercial property. There is often much less guidance out there for buying commercial property in comparison to residential. That’s why we’ve put together this guide to help first time buyers understand their position in the world of commercial property purchases and cover the key things they need to know.
Can first time buyers buy commercial property?
In short yes, as long as they have the funds in place to make the purchase, whether that’s purchasing it outright or using a commercial mortgage. There are generally two main reasons why people might consider purchasing a commercial property, either to use it for business purposes, or as an investment (to let or sell it on). Both options can be successful at generating money for the buyer, but there are still certain factors to be aware of.
Buying a commercial property isn’t something you should jump head first into without carrying out substantial research and weighing everything up. If you do decide to purchase a commercial property, it’s important to utilise experienced commercial conveyancing professionals like the team at Toomey Legal. This will help to ensure that the process goes as quickly and smoothly as possible with our conveyancers guiding you through each stage and offering the relevant support you need as a first time buyer.
Top tips for first time buyers buying commercial property
As a first time buyer, it can be difficult to have a complete understanding of everything you should consider when purchasing a commercial property. Below are some key tips to help buyers make a secure purchase that will benefit them.
Plan your goals
Before making a commercial property purchase, you should know what your investment goals are. This involves thinking about what type of property you want to buy and why, what you’re going to use it for, etc. By planning answers to these questions, you will get a starting point for exactly what you’re looking for. This will help to narrow down the types of properties you’re searching and ensure you find one that ideally matches your needs.
Research the market in detail
Research is the core of every successful purchase in commercial property. You should have an in-depth knowledge of market trends, rental rates, vacancy rates, and the overall economic position of the area you are wanting to buy in. Get to know the location as much as possible and when you have a good insight into the market you will be able to make informed decisions and highlight profit potential.
Set your budget and stick to it
A budget is essential in any property purchase you make whether it’s residential or commercial. You should already know how you’re going to finance your purchase. It’s important to note that commercial loans can have different terms and conditions to residential properties, so be sure to shop around to find the best deal that suits your requirements. As well as setting your budget to ensure you don’t overspend on a property, you should also carry out profitability/viability checks. This will help you to understand your profit margins and make sure the property will generate profit that eventually surpasses your investment.
Consider the potential in a property
If you’re a first time commercial property buyer, you might be thinking that you can buy a property that is ready to go straight from the start. However, you should always look at the potential for growth and improvement in the property. You could identify an opportunity that has been previously missed, which could lead to impressive earnings as a result. For example, look at foot traffic, accessibility, future development plans in the area etc.
Conduct due diligence
As with residential property, carrying out due diligence is essential when buying a commercial property. Due diligence involves reviewing the property’s financial records, any lease agreements in place, and any pending legal issues, if it has any. It is important to do this as it will protect you from any hidden liabilities and if you do find anything you will be in a stronger negotiating position with the seller.
If you’re looking at properties in the Newcastle area, be sure to use Toomey for your online conveyancing in Cramlington. Our team are dedicated and experienced experts in their field and can ensure the process goes as quickly and efficiently as possible. They will be able to help review any relevant information on the property during conveyancing that might affect the sale and advise you accordingly.
To answer the original question of this guide, yes, a first time buyer can a commercial property. However, to make sure it is a good investment for you, you should seek relevant advice from industry experts and don’t rush into it without confirming that it is definitely the right purchase for you. When you’ve found a property and you’re ready to start the paperwork, our commercial conveyancing solicitors in Cramlington are on hand to help. Get a quote online today and please contact us if you have any questions.