Have you decided to purchase commercial real estate in Montclair? Investing in commercial real estate is a big decision, and it should be celebrated! As you have likely realized, when purchasing real estate, there are many factors to be considered. Additionally, there are many different property options in commercial real estate, which only adds to the decisions you have to make. When you begin your search, be sure to keep the following factors in mind. Being prepared is the best way to ensure you will make a great buying decision.
Important Factors for Commercial Real Estate in Montclair
The first thing to decide on is what type of property you want to invest in. As mentioned, you have many options for commercial real estate in Montclair. You could purchase multi-family housing, retail space, industrial property, office space or something else. Be sure to do some research on the responsibilities of property owners for each type of property. You should invest in something you can handle and afford. Once you make your decision, ask yourself the questions below.
Where is the property?
The location of commercial real estate in Montclair is something to pay close attention to. Try to get in the mind of your tenants’ customers and think about where they would like your property to be. The type of commercial property you purchase will do best at a different location than another type of property. As an example, a warehouse will not need the same location as a shopping center. If you decide to work with a commercial real estate broker, they will be able to help you find a property in a great area of Montclair. When you are on the hunt for a property be sure to consider the location.
How big is the property?
Make sure to put careful consideration into the size of the commercial property you wish to invest in. This is a very important factor your potential tenants will be interested in. Each unit should be large enough to cover your tenants’ employees, equipment, merchandise, customers and anything else they need. Many tenants will turn down a property if they feel it is too small for their needs. This is why it’s a good idea to purchase property that will be large enough to meet the needs of your ideal tenant.
In addition to making sure a property isn’t too small, you also want to make sure it isn’t too big. Properties that are very large in size are also typically more expensive. A property that is too expensive can also make tenants decide not to rent. It is best to invest in commercial space that is the average size and price for the neighborhood of Montclair you are interested in. You can also look at the typical size needed by specific industries you are trying to attract to your space. This will ensure your property will work for as many tenants as possible.
Does the property look nice?
The appearance and style of your property are also very important factors to consider. It’s good to understand that properties you would label as outdated, overly eccentric, and too bold tend to take longer to attract tenants. Having this problem is clearly something you want to prevent when owning a property. Your tenants will want to lease a property that matches their business and their customers will like. I recommend purchasing a property that isn’t too bold and that is relatively neutral in style. This is the safest choice when trying to attract the most tenants as possible.
Something else to keep in mind is that your tenants will likely want to make changes to their unit. Usually, tenants request to make changes like paint color or the removal of a wall or two. Try to be as flexible as possible with the requested changes. This doesn’t mean you should always agree to anything they request. But do try to be flexible with what your tenant is able to do. This will make it easier for you to attract a larger pool of potential tenants. Some landlords will also require the tenant to pay for renovations before moving out, to restore the unit to how it looked before they moved in. That may, or may not, be necessary for you, but it’s worth considering.
The Costs of Being a Commercial Real Estate Owner in Montclair
When making their first commercial real estate purchase, many people think the listing price of their property is the only charge they will face. The truth is, there are many costs associated with owning a commercial real estate property. When you expect these costs, you can plan ahead and budget for them. You can also know how much you need to charge tenants in order to make a profit. Keep these costs in mind when you are deciding on a property:
Repairs
If you know the property will need repairs, be sure to budget for them. Repairs can be very expensive and can take a major hit to your bank account if not prepared for. While you own the property, you will also be responsible for repairs to roof damage, air conditioning units, plumbing and more. It is smart to put money aside, so you can be prepared for any repairs your property needs.
Utilities
The cost of utilities is another expense you should look out for when owning commercial real estate in Montclair. You have the option to charge your tenants for their utilities each month, or working a fixed cost into their monthly rent. When you charge a flat rate each month, make sure you charge enough so you are not losing money on utilities.
If you have any common areas in your commercial real estate property, you may want to put a common area maintenance (CAM) fee in place. This fee can cover any water, electricity or gas used in the common areas of your building. It can also cover the cost to clean and restock the area.
Renovations
Properties with the best deals will usually require renovations. Most landlords want a property to look updated, high-quality and expensive. With that being said, you may need to change out some fixtures, remove stained carpet and apply a fresh coat of paint. As you can imagine, renovations are sometimes expensive, so try to get a contractor to give you a quote as quickly as possible.
Want to Purchase Commercial Real Estate in Montclair?
I hope the advice on this page was very useful for you. There is a lot to remember when looking for commercial real estate, and I want you to be well informed. If you are ready to start your search for a property, I recommend working with an experienced commercial real estate broker. This will help you know the best areas, find the best deals, and get access to more properties.
If you do not already have a broker, I can help you find your ideal Montclair property. Feel free to connect with me through the contact page on this website.
