4 Essential Tips When Buying a Commercial Property

Commercial property refers to any form of real estate property solely for business purposes. Like ordinary real estate, there are a lot of commercial properties to choose from, each with its types, features, and classifications.

Having a commercial property is a departure from the usual investments for personal use. There’s a lot more required from an investor for commercial properties like greater capital and budget, among others. It’s safe to say that investing in commercial property requires thorough research and so much more.

Here are the four essential tips that can walk you through buying commercial property:

1. Assess The Location

When you’re buying commercial property, one of the most important factors you’ll have to consider is the location. Buying commercial property means it’s for business. And for businesses, location is everything. It can make or break your business to a great extent.

As you go through the location of each possible commercial property you’re keen on buying, you may want to ask questions like:

  • What are the zoning laws in the area where the property is located?
  • Are there any similar businesses located within the property’s vicinity?
  • What’s the current economic standing in the area?
  • What’s the overall safety reputation of the local area?

Answering these questions can protect you from possible problems that may arise. Take the time to assess the location very well, so all of your concerns would be addressed.

2. Know Your Purpose For Buying Commercial Property

Different investors or buyers have their respective reasons behind why they’re purchasing commercial property. Your motives can shape other decisions relating to your choice, which may be personal to you. So, to narrow down your options, it’s a good idea to go back to the purpose of why you’re buying commercial property.

Your purchase will only be futile if you don’t know what you hope to accomplish through buying that property. Be mindful of the things you want to do and then look for the right investment that can help you achieve that goal.

There are many endeavors you can do. Here are some of the things you can consider:

  • Run your own business. This means your purpose for buying commercial property is for you to run your business in it;
  • Land banking. This refers to the process of investing or acquiring commercial property to utilize it in the future;
  • Passive investing. This refers to commercial property like those rentals wherein you receive passive income monthly for the rent payments;
  • Development. This means your purpose for buying commercial real estate is to build your own development from scratch.

3. Study The Building’s Condition

This tip applies if you intend to purchase commercial real estate which already has an existing structure. This situation has its respective pros and cons, but the best advantage would be seeing that the building still complies with the current building code standard.

If not, you may be in for a costly transaction. The last thing you want is to be paying for a building that you’ll have to do a major rework on. Assess the kind of wear and tear the building has gone through so you can determine whether to go for that building or develop one from scratch instead.

4. Secure Your Financing

Another distinction between purchasing residential real estate and commercial property is the latter would often be more expensive. So, you need to secure the right financing option for it.

As you do so, it’s imperative to keep your budget in mind as well. You shouldn’t have to feel compelled to invest and secure financing for a hefty amount, especially if you know that paying it off would be troublesome. If this is your first time buying commercial property and you’re pinching pennies as an investor, it doesn’t hurt to start with small properties first. Once you’re accustomed, then gradually look for bigger properties.


Investing in commercial property shouldn’t be daunting. There’s so much more that goes into the process, but with the ideas you’ve just read, it’s possible to wind up having a good purchase. The tips above would serve as your blueprint for your commercial property investment journey.

Among all pieces of advice you’ll get, the most important thing is to not jump right into the decision immediately. A good buy is one you’ve taken time to think thoroughly and assess whether the commercial property meets your needs and preferences and can drive the results you intend to achieve. Consider the ideas mentioned here as you plan and prepare.

This article is for information and educational purposes only and does not form a recommendation to invest or otherwise. The investments referred to in this article may not be suitable for all investors, and if in doubt, an investor should seek advice from a qualified investment adviser.

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