investment account to satisfy a prospective lender’s down payment requirements.
4) Evaluate Relative Affordability – It should come as no surprise that any decision to purchase property should include a “rent versus buy” financial analysis. This type of analysis typically involves at minimum a comparison of the monthly rent and estimated mortgage payment, including interest, principal, and taxes. In this comparison, you are not just looking to evaluate which expense is higher; you are looking to determine the relative affordability of each option. Ideally, your space related expenses should be roughly 10% or less of your total revenues. So if you are currently renting office space that represents 5% of your total sales and you now have an opportunity to purchase an office condo at a price and with a mortgage payment that represents 25% of your annual revenues, you need to either hold off on buying property until commercial real estate market values settle down or find another acquisition target that is more affordable.
5) Target Stable or Emergent Communities – Last but not least, you must consider the golden rule of real estate investing “location, location, location”. It is really important that you do your homework an identify neighborhoods, commercial districts, geographic areas that have relatively flat and/or upward trending market values (limited volatility in real estate prices). Some leading indicators of strong/high potential community areas are those with: increasing real estate
development activity, major public infrastructure investments (i.e., roads, schools, public transit, and police station), expanding high quality commercial base (i.e., new grocery/retail, cafes/restaurants, etc.). If you choose the wrong area and market values in your chosen location drop, you run the risk of losing valuable customer traffic as well as eroding your equity interest in the property.
There you have it! There is a time to rent and a time to buy. However, before you purchase commercial property, review your business plan; consult with your accountant and an experienced commercial real estate broker to ensure you are really ready and able to make this investment. If you are, that’s great; you are well on your way to building long term assets for your business. If not, congratulations for taking this important step and remember to use the five criteria outlined above as a reference to better position your company to buy commercial real estate in the future.
This is a great opportunity to lease commercial space on 23rd Street in Panama City. This is a double corner condominium style commercial unit located at the Willow Lake Commercial Center. This unit has a fully built out upstairs with a bathroom and break area. The property is in great condition and there is ample parking for this building.
This unit located in the Willow Lake Commercial Center is located on 23rd Street in Panama City across from Sam’s Club making this an ideal location for any office or retail user.
Darren Haiman
office(850) 785-2233
mobile(850) 814-8154
www.nationsre.com
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$158,000
3,238 SF / 1.87 Acres
Well & Septic On-Site
2-Lane Paved
621369
861 Lakepoint Rd., Alford, FL
7
FOR
SALE
3,238 SF Light Industrial Building with 1.87 Acres
This building is conveniently located just off of Highway 231 in the Compass Lake area of Jackson County. The property is fenced with plenty of yard space making it an ideal location for construction, distribution, or light manufacturing.