Buying or Leasing Land for Your Business: Questions to Ask

Buying or Leasing Land for Your Business: Questions to Ask

Buying land for your business is a big step no matter how far you are in your journey as a business owner. Therefore, being prepared and knowing what to ask ahead of time is important. Whether you are starting your business or expanding, here are some questions to ask before deciding to purchase or lease that land:

  • Is this a good location for my business type and goal? For what function are you buying this land for your business? Will you be opening a store that needs to be out in the open with a busy surrounding area so as to draw customers in? Or will this be a headquarters or administration office that will need to cater to car traffic more than foot traffic and will probably need to have a larger space? Which bring us to our next question…
  • How much space do I need? Will this need to be a large space for manufacturing products or handling administrative business or can it be a smaller, individual store? It is also important to know how many employees you will be hiring and how many customers you will expect so that you can anticipate how comfortably these people can fit in your building. If you are buying the land, you will need to know measurements rather than just having a feel for it as it can be challenging to visualize building size when you are just looking at land.
  • What’s my budget? Quite simply, you need to ask yourself if you can afford the property. If not, can you take out a loan and are you willing to?
  • How’s my credit? If you have decided you would like to take out a loan, make sure you know how your credit is. Maybe you will have time to improve it, if it needs improving, before seeking out a lender.
  • Do I need to make a down payment? Some lenders for commercial real estate request that you make the down payment. Make sure you know what your lender requires and have plenty of time to save up for that payment if need be.
  • Do I have a real estate agent or broker? As the purchasing of commercial land can be a complicated process, you may want to consider consulting a professional to guide you through all the details.
  • Have I done my own research? You want to be in the know about the property, rather than totally relying on what the seller says about it. Research what regulations apply; what zoning regulations or building codes there may be. Also, have someone run an appraisal of the property and consider getting a Land Information Memorandum which gives you a more holistic background on the land.

If you decide to buy, make sure you aren’t flying blind into an unfair agreement. Having an attorney to help with paperwork and contracts can be a big help. Contact us today if you have any further questions or seek counsel.

Photo Credit: AKZOphoto

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