If you’ve considered investing in Chicago, an excellent possibility may be the purchase of commercial property. In our latest article, we will ask you 10 questions in order to help you find the most ideal commercial property in Chicago.
Investing in Chicago commercial real estate can be a very wise call. There are many kinds of commercial investments you can make. You can buy office space, retail, manufacturing space and more. There are creative techniques, like the purchase of a medical building, equipment and all, and contracting the space to medical professionals seeking a location to set-up.
Or perhaps you can take advantage of a warehouse to build a space for technicians to create and sell their services. The list never ends. Your investment can not only make extra cash, but you have the opportunity to buy something you love. Keep reading for more information about determining the commercial property that is right for you in Chicago!
10 Questions To Help You Choose The Right Commercial Property in Chicago
Question 1: What is your budget?
Commercial property can come in a wide array of prices. Individuals can purchase and rent a small one-room office property. Or you might invest in a shopping center with many occupants. Before considering a commercial investment in Chicago, it’s important to recognize what you can truly afford. What will the taxes look like? You will also need to size up your costs and GRM, or gross rent multiplier. This can help you verify if the buildings you want to acquire, is actually worth it.
Question 2: Are you purchasing for your organization or as an investment option?
If you will have your organization in the property itself, the buying decision you create becomes far more professional. The building will have to meet each one of your needs that include things like a good travel time and anesthetic you specifically find desirable, ie, the design needs to work with your various needs. You might prefer to look at purchasing a smaller office building and leasing out some of the space to balance out the price of your funding.
If you are buying strictly for investment purposes, the distance to where you reside becomes less important. It is not likely that you will need to stop by the property very frequently when you have good tenants in place.
Question 3: Are there contracts with other occupants currently in effect?
This can be a good or bad thing depending on who they are and what amount they are paying monthly. Make certain to fully evaluate the lease, understand the policy for rent increases, the potential to modify the space and more. If the former landlord doesn’t have the necessary paperwork readily available, you could end up with cheap rental prices and costs to restore units that were customized by residents.
Question 4: How much time can you dedicate to the property?
This will help you specify if you should invest in a small outlet or a 5 story office complex. Not only will you have to spend more time on rehabbing issues with a larger building, you will also have to overcome tenant issues and routine things that turn up. In the event that you have a larger property, it can become a full-time role! This takes us to our next question…
Question 5: Will you need a property manager?
If you aren’t seasoned taking on a large commercial property, hiring a seasoned pro is a must. At the very least until you get a hang of it yourself. They can help you understand the costs and ways to attract the right renters. Not all property management services are alike. Size up a few, not only for cost but to uncover what they deal with.
Question 6: What’s your final target?
Do you have a specific income you are trying to bring about within a certain duration? Compare the ROI on several properties before making your final purchase. Maybe you should “trade” commercial assets rather than holding long-term. Or maybe you should look at a mixed-use property in a more on-demand area.
Question 7: Are you prepared for rehab on a larger scale?
If you have ten tenants, you can plan on 10x more calls to the landlord. You will have ten sinks that can flood the place. Ten security deposits to manage etc. With a larger building, you can count on many more calls to the local handyman, if you don’t have an individual working on-site full-time. On the other hand, something like a roof will cover all ten tenants at the same time. Renovating this will have an effect on each one of the tenants simultaneously.
Question 8: What is the neighborhood like?
A good deal in a bad location might not attract the high-quality tenants you are searching for. Depending on the kinds of businesses, you will want to consider foot traffic and accessibility. Is it viewable from the main road? Is there enough parking for visitors? You will also want to consider proposed development plans to see what the future of the area will bring.
Question 9: Will the time of year influence your investment?
In some parts of the nation, businesses like restaurants or service related fields will see a spike during certain times of the year. For instance, many restaurants see an upswing of patrons during summer months. This is also the time you will see many new businesses appearing, all of which need a place to function.
Question 10: Do you have a strong team?
Any investor will tell you that they are only as strong as the team they work with. Seeking the services of a good renovator, inspector, title company accountant and attorney will all help you make your financial investment dreams a certainty.