10 Things To Consider When Buying Commercial Property


In real estate, commercial properties and housing businesses are usually long-term leases. Some examples of commercial properties include buildings, office space, apartments, condominiums, rental homes, and even a plot of land. These commercial properties are designed to generate profit or passive income through monthly rent. Hence, commercial properties provide good investment opportunities.

Are you planning to buy commercial property? Below are the important things to consider when buying one.

1) Check Your Financing Options

Buying commercial property is like getting a pre-approval for a house purchase. It’s imperative to understand different financing options. In this way, it’s easier to find the right property within your budget and complete the deal without money issues. Talk with your bank or lending company to find your financing options.

2) Hire A Real Estate Attorney

Investing in commercial property involves many legal aspects such as handling multiple parties, lease agreements, permits, and licenses. It’s more complex than buying residential property.

You need to ensure you buy commercial property with a good revenue rather than a headache caused by titling, real estate taxes, and transfer of ownership issues. Hence, it’s a smart move to hire a legal expert such as real estate attorney Ryan Gibbs.

Here’s how a real estate lawyer can help:

  • Ensure all documents and transactions are legally binding.
  • Save you time, energy, and money finding out if the commercial property is a good buy.
  • Conduct lien and title search, inspection, and other checks before closing the deal.

3) Location

While most commercial properties are situated in central business districts and good business locations, it’s still crucial to consider this factor. The location of commercial property can influence your property management, especially if you’re planning to self-manage it rather than hiring a landlord.

Will you be able to get to the commercial property right away when issues arise? Or do you have to travel miles away just to get there? Here are some location considerations when buying commercial property:

  • Type of commercial property (retail, industrial, etc.)
  • Transportation
  • Community amenities such as hospitals
  • Proximity to residential areas

4) Revenue

More than anything else, you have a big say about the past, current, and projected revenue of the commercial property. The seller should be able to show the property’s good history of good profits for you to consider the deal. You can ask to see their book showing the vacancy rate and income generated.

5) Check For Hidden Charges

It’s important to know the running cost of maintenance and utilities of the commercial property. By doing so, you can analyze properly if the property is worth buying. Make sure to get all financial details, including minor fees and charges.

6) Analyze Scalability And Flexibility

Compare your prospective commercial property from the rest. Can you modify the property if necessary to suit your needs in the future? For instance, if you’re buying a gym, is it feasible to convert it into a restaurant?

Here are the benefits of analyzing scalability and flexibility of a commercial property:

  • Assess future profitability
  • Determine exit options
  • Check alternative business options

7) Don’t Miss Checking The Structural Details

Check the internet connections, HVAC, phone coverage, and other structural details to ensure you’re getting a good purchase. You want to ensure all business transactions run smoothly by ensuring these things are in good condition.

8) Interview The Tenants

You can interview the current tenants to get insights as to the things they love, hate, and like to improve about the commercial property. You can ask them about the following:

  • Years of leasing
  • Projected years of leasing
  • Reasons why they chose the property
  • Complaints and concerns
  • Rental fees and other expenses

9) Conduct Market Research

The commercial property atmosphere changes from time to time, especially during the pandemic. So, you should know the perfect time to buy one to get the best value for your investment. Your market research must include the following:

  • Existing commercial property prices
  • Timing
  • Economic situation
  • Bank loan interest rates

10) Be Realistic

Not all commercial properties are the same. You can’t expect these properties to generate good income consistently every month. Remember one aspect in making good revenue is property management. Therefore, you should also hone your skills in property management to achieve your desired outcome for your commercial property.


It’s important to consider the above-mentioned things when buying a commercial property.  You want to ensure that once the deal is closed, you won’t be running into a big trouble, especially when it comes to legal and financial obligations, as well as tenant issues left by the previous property owner. Hiring a legal expert is one way to ensure your transaction is legally binding and avoid future problems.


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