You don't have to use a real estate agent to find property, but while they can be expensive, they also take the hassle out of finding a suitable location.
Information on Buying Property
When buying commercial property, you'll probably want a Special Warranty Deed. A Special Warranty Deed protects you against liability for the debts of or any damages and problems caused by the previous owner.
Pros:
- Your new property can be counted toward your business' assets. Owning property is typically seen as good long term investment.
- You'll have a fixed overhead with your mortgage.
- You can get revenue from subletting.
- You have the freedom to manage the property, and use the space how you want.
Cons:
- The high initial investment requires cash flow.
- There's no guarantee that the property's value will appreciate (as we saw with housing bubble).
- You'll have added maintenance responsibilities.
- You'll have to make sure your property is properly zoned if you plan any construction.
Information on Renting or Leasing Property
When renting or leasing commercial real estate such as office space, you'll need to negotiate and sign a commercial lease. The more specific requirements you have about your work space, the less negotiating room you'll have with your landlord. Leases can last anywhere from 1 to 5 years, and most are renewable.
Pros:
- Paying rent has a much lower initial expense than purchasing property.
- Renting or leasing gives you increased flexibility to change locations later (because of growing staff and operations).
- The landlord handles most of the maintenance concerns.
- Smaller spaces are available to rent, whereas properties for sale tend to be very large.
Cons:
- Renting someone else's real estate means you'll be limited in what you can do with or to the property.
- Some leases are for a relatively long time (5 years), so you'll have to take growth into consideration.
- Leases may initially seem cheaper, but there are usually extra or hidden costs, such as common area costs, or split utilities.
- You may not get everything you want in the lease; if you have many demands, you may not be able to negotiate a lower rent.
Whichever option you choose, Rocket Lawyer has the legal documents you need to help you get started! Visit the Real Estate Legal Center to learn more.
This article contains general legal information and does not contain legal advice. Rocket Lawyer is not a law firm or a substitute for an attorney or law firm. The law is complex and changes often. For legal advice, please ask a lawyer.