Purchasing in Austin’s Commercial real estate market
As a business owner, buying commercial real estate in Austin can be one of the wisest investments you make, but the decision to purchase a commercial property must be weighed very carefully. It is important to know that buying commercial real estate can be very complex, and building ownership has some distinct differences that make ownership a viable move for some businesses, and not good for others. In the right circumstances, however, the rewards can potentially be great. Whatever you want to invest in—office, retail, industrial or land — Habitat Hunters has the trustworthy specialists who can answer all your questions about Austin TX commercial real estate and walk you through each step of the buying process.
Reasons to Buy Commercial Real Estate in Austin
There are a great many reasons to consider purchasing commercial real estate in Austin. For starters, a new study based on Bureau of Labor statistics and the Yardi matrix has determined that Austin is one of the top markets for commercial office real estate investors in 2018. This booming city consistently ranks among the best places in the United States to invest in because of the lower price (compared to other primary markets such as New York City and San Francisco) and high occupancy of its rental market.
Other perks include a strong job market and a high quality of life. In addition, Austin benefits from fast-growing startups and its high-tech industry.
Some of the other benefits of purchasing commercial real estate in Austin include excellent appreciation of asset value, a regular stream of income (especially if you plan on leasing part or all of the commercial space), tax advantages, equity and cash flow through leverage and pride in ownership.
Important Steps for Purchasing Commercial Real Estate in Austin
Whether your small business is thriving and you are ready to take the leap into owning your own commercial space, or you are interested in buying a space for rental income, it is important to take several important first steps.
Here are some things to do when considering buying a commercial property:
- Do a ton of research: evaluate the Austin real estate market to get an idea of how much properties cost in Austin TX and the surrounding areas.
- Review your income and expenses and determine how much you can afford. What’s your risk tolerance? How much are you willing to put into it?
- Do a thorough lease versus purchase analysis: buying commercial property is a substantial financial commitment. You will not only need to consider the price of the building, but also the cost of any improvements, the closing costs and continuing costs such as taxes, insurance, utilities, maintenance, etc. Compare these costs against a comparable building that is available for lease to see which option makes the most financial sense. When weighing your options, keep in mind that rents tend to rise — so while owning may be more expensive than renting short-term, it could prove more economical in the long run since your payments will remain steady.
- Assemble a team: Partnering with a lawyer, certified public accountant and an experienced real estate agent with a strong background in commercial real estate is a must when making such a big financial investment. Each will offer their expertise and will guide you through the process.
Shopping for the Ideal Commercial Property
Similar to buying a residential property, when buying commercial real estate Austin, you will need to make a list of must-haves. Consider your business’ goals, employees and customers when determining the type of property you need. What you look for in a commercial space will depend on your business. For example, if you are a retailer, you will need adequate parking for customers, whereas if you are a distributor, you might need a large loading dock.
Other considerations include:
- Location: where you choose to hang your “open for business” sign can make all the difference in the success of your business. Consider who your customers are and how important their proximity to your location is. Are there competitors nearby?
- Flexibility: does the space have room to grow as your business grows? Conversely, if the space is large, can parts of it be rented out?
- Zoning ordinances: You will need to comply with zoning laws and other rules. Find out if any ordinances or zoning restrictions could affect your business in any way.
- Inspect the infrastructure: does the building have up-to-date electrical wiring, air conditioning and plumbing? Are there any structural defects or environmental contamination issues? Hiring an independent engineer and other professionals is a must as they will alert you to any problems or concerns.
- Demographics: Your Austin Realtor ® should be able to provide you statistical data about the characteristics of the population where you are looking, such as the age, gender and income of the people within the area.
- Traffic counts: Is your business dependent on high visibility and traffic? If so, this is critical information.
- Signage: Do you need signage? You can’t assume signs are allowed, so depend on your real estate agent to find out the specifics to each property.
If you are considering taking the step into owning commercial real estate in Austin, or if you’re planning on buying a house in Austin and doing an Austin home search, contact one of Habitat Hunters’ highly knowledgeable real estate agents. Our Austin TX real estate agency brings local market knowledge and sound industry insight and analysis to help you achieve your commercial real estate goals.