While there are a lot of commonalities between owning commercial and residential investment properties, there are some key differences that you need to be aware of to be successful in the business. The difference is the type of clients you will be attracting to rent your space. However, there are also differences in laws and responsibilities. You will need to be aware of all local and state regulations, fire codes, and other stipulations that may impact your ability to rent your property.
Here are four factors to consider when renting and designing a commercial property.
It is critical to use a commercial real estate agent and a commercial lease lawyer when renting commercial property and understanding the most significant differences in marketing and rental law that need to be considered with commercial properties. You may not know the differences if you’ve worked primarily with a residential property or if this is your first venture into property management. Your commercial lease agreement should be created and approved by a lawyer to ensure it includes everything that needs to be included to protect you and your property. Your lawyer can also handle any issues that arise with zoning or local regulations.
When designing or renovating a space that will be used commercially, you need to consider functionality first and foremost. For example, commercial electrical design is based on where the outlets and fixtures will be required to run successfully. Not having enough outlets to run a point-of-sale system will make the space useless for retail. Likewise, the plumbing, doors, and windows should all be designed for the maximum functioning of a future business. Talk to a professional designer about how to best use the space, given the type of business you are trying to attract.
When considering functionality, you need to consider what the space is most likely to be used for. For example, retail space will have significantly different electrical and plumbing needs than a commercial storage space. As the property owner, you need to know what space can be used for, as that will directly impact what kinds of businesses you can market to. There are many different kinds of commercial space. You can change the space according to what it can be used for or what you want it to be used for. You may create a mixed-use space that will allow you to have multiple tenants on one property to maximize profits.
While you are hopefully working with a commercial real estate agent, you can still be actively involved in the marketing of your commercial properties. When marketing commercial real estate, it is critical to remember that you need to market directly to commercial clients. Running an ad in the real estate section of the local newspaper may not be the best approach. You need to understand your target audience based on the type of commercial space you have available and the best ways to reach those people.
Running a successful commercial property business can be a daunting task. There is a lot of specialized knowledge you likely don’t have when you first start, but you will learn as you work and grow your business. Relying on other professionals and mentors can help you learn a lot quickly. You also can use a management company to help in the renting and maintaining of the property. A management company will allow you to rely on the experience of others and be a hands-off owner. How involved you want to be with your investment properties is up to you.