How to Prepare for Buying Your First Business Building

When building up your own company, you as the owner have much to consider, such as when to increase market size, how to start an online presence, and when to hire employees. As the business grows, it may be necessary to purchase a building. The benefits of owning one’s own building can be enormous if the following considerations are first carefully made to protect the investment. Here’s how to prepare for buying your first business building.

Look at the Future
Because a building can be such a huge investment, it is vital for the owner to consider their finances and projected cash flow first. In fact, the wise business owner will make projections up to 10 years in the future since most buildings require a down payment of approximately 25 percent. Use a mortgage calculator from reliable lenders that have the best mortgage rates in Austin or your nearby area.

Find a Commercial Realtor
Because buying a large building is an enormous undertaking, a commercial realtor will be needed to navigate the intricacies of the purchase. A real estate agent will be able to discuss locations, nearby amenities, costs, and will help the business owner schedule a building inspection.

Go with an LLC
If the business has not been made a limited liability corporation yet, this should be done now. An LLC takes the liability for damages or lawsuits away from the individual, and puts them solely in the domain of the business. This will protect your personal finances, should something go wrong.

Perform Due Diligence
Buying a business building is a great time to practice caution. A business owner should take at least 30 days to consider the purchase to look into all aspects of the building and at your own assets. Considerations to be made include previous and current building tenants, current building insurance policies, maintenance contracts, and current liens.

Finance if Necessary
Most business owners will find they need to finance a building purchase with a commercial mortgage. It is best if a lawyer knowledgeable in commercial assets be present when meeting with a lender to go over repayment terms, interest rates, and guarantees. Business owners should also ensure they have money left over after financing in case of unforeseen events.

Buying a business building can be a great investment towards the future. It can eliminate rental costs, provide extra money through tenants, and actually make money in the future should the cost of the property appreciate. To make the best investment possible, business owners must thoroughly prepare for this big step by considering all financial aspects and meeting with qualified professionals.