Assessing commercial real estate for the purpose of fixing and flipping is more of an art than a science. Purchasing properties with the intent to resell is always an educated guess. Luckily, there are factors you can measure that help determine the desirability of a particular spot for business purposes. Here are four factors that should be examined when hunting for spots with an entrepreneurial appeal.
Customers are the lifeblood of every company. The easier it is for browsers to swing by a storefront, the more likely they are to become customers. Consider the proximity of parking to main roads and highway exits. Is there a nearby lot? Does the street have spots directly next to the store? Is the building easily visible? Check that your location is easily findable, whether by GPS or old-fashioned directions. Identify landmarks that make locating your spot simple.
Every company has unique requirements. Select buildings that appeal to a wide variety of buyers. Assure that the space you are buying can be reshaped without too much effort. Are there enough electrical outlets for any type of venture? Can the lighting be switched out without much hassle? What about walls? Can they be easily knocked down or moved? Look at the space from the perspective of a business owner.
Your building’s surroundings are as important as the building itself. The neighborhood where a store resides directly impacts its value. Salaries of nearby residents, for instance, play a role in determining store pricing. High crime discourages casual shoppers. Those purchasing storefronts also want their place of work to be near their residence. Is this an area where you would want to live? Think about the same elements you would if you were purchasing a residence.
When nearby stores are thriving, it’s a positive sign. Odds are that a new venture will similarly survive. Are restaurants filled with diners during meal hours? Is there a nearby shopping center teeming with patrons? How many passersby are carrying bags with newly purchased goods? These observations can provide important clues regarding the financial health of the area. Find locales where commerce is on the upswing.
The danger of investing in commercial real estate lies in the risk that the market rejects your acquisition. When this happens, investors face an enormous monetary burden, yet the rewards for playing the market wisely are huge. Use these tips to evaluate a property’s resale value before making a financial commitment.