So, you have finally decided to purchase a commercial space in the heart of Kent, right? Well, that’s a pretty interesting choice. Of late, a lot of towns in and around Kent are witnessing an incredible real estate boom.
According to reports published by BDO LLP, a business advisory firm, construction businesses are growing at a rate of knots in the counties of Sussex, Kent, and Surrey. The report further stated that 1⁄4th of the rapidly growing medium-sized businesses in these regions are related to real estate and construction.
Buy a Commercial Space? Some Points You Need to Keep in Mind
If you are one of the many people wanting to buy commercial property, then here are a few things that you need to keep in mind.
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Before You Begin, Ask Yourself a Few Questions
Okay, before you begin, just take a moment to ask yourself these questions
- What do I want?
- Do I have the finances to buy the property I want? The reserves, the finances, and the ability to make down payment.
- What’s the location? (Now, this one’s really important).
- Do I really need to buy the property or I can simply lease it?
- How much risk can I tolerate?
- Am I ready to partner with someone else just in case the property is too expensive?
Get Used to Some Real Estate Vocabulary
There’s every chance that you’ll be unfamiliar with a lot of terms which are frequently used in the world of real estate. Ah, nobody is asking you to memorise all the terms. Just get the hang of a few terms in order to make the working process easier and smoother.
Here are a few terms you can start with:
- Debt Service Coverage Ratio: In the simplest of terms, it refers to the amount of debt that a person can cover every year with his income.
- The Cap Rate: It is the income generated by the property divided by the property’s actual value.
- Loan-To-Value: The ratio of the money you have asked from the lender to the total purchase value of your property.
- Vacancy Rate: Percentage of properties lying vacant in a particular area at a given point in time.
Don’t Just Stick to a Single Property
It is advisable to consider a host of properties when you step out in the market to buy a commercial space. List down the pros and cons of all the properties you have visited. After this, shortlist the ones that you think are the most suitable.
This one’s important. Experienced commercial property buyers conduct comprehensive location recces before planning to buy a property. It goes without saying that properties near schools, hospitals, and shopping complexes will have a greater value and will also find a large number of buyers.
Ask the Experts
Buying a commercial property is a daunting task. The paperwork is complex and the process is time-consuming. If you’re planning to buy a commercial space in Kent, then it’s advisable to contact a commercial surveyor in Maidstone to make your life easier and convenient.
Getting the Finances Up and Ready
If you’re a common man planning to establish your own business, then you’ll need a considerable amount of time to get the finances. It goes pretty much without saying that you’d need to avail credit facility in order to get the finances.
The kind of credit you choose also does matter. Approaching a bank is your best alternative because generally, banks charge a lower rate of interest than most private and independent lenders.
And most importantly, be patient. You can’t buy a commercial property overnight. Take your time and just go with the flow.
So, that’s pretty much about it.