Buying commercial real estate in a small town is a bit different than buying commercial property in a major metropolitan area. While large cities have vibrant and profitable commercial markets, this isn't always the case for small towns. Some small towns are booming with business and their real estate values are continually climbing. However, other small towns are struggling with declining populations and decreasing commercial real estate values. If your business is moving to a small town and you are shopping for commercial real estate, then these tips will ensure you get a good deal on a property in an area with a potential for future profits:
Tip: Understand the Correlation Between Occupancy Rate and Potential Investment Value
When searching for the right small town to move your business to, it's important you choose one where there is a very high occupancy rate for commercial buildings. A town with few vacancies shows that businesses are making money and keeping their doors open. However, a town with too many empty buildings or a large list of commercial rentals is a sure sign the area is struggling. Buying commercial real estate for sale in a struggling town is almost always a losing proposition.
Tip: The Property's Location Within Town Matters - A Lot!
You would think that in a small town with just a couple of stoplights it wouldn't matter where your new commercial space is located. However, nothing could be further from the truth! If you choose a building on the main street going through town, then everyone who drives by will see your new business. Alternatively, if you are located on one of the side streets off of the main street, then only a small percentage of the population will ever drive by. When buying commercial real estate in a small town, you need to buy on the main street. Otherwise, your business will be nearly invisible to the local population and no amount of advertising will ever change that fact.
Tip: Be Aware of What a Historical Landmark Designation Really Means
Lastly, many commercial buildings in small towns come with a historical landmark designation. While buying a historical property with old-time charm is appealing, buildings with historical landmark designations often come with lots of restrictions on how you can maintain or renovate them. Since historical landmark restrictions can be problematic even for simple projects such as painting a building's exterior, it's important to completely understand the restrictions in place before making a purchase offer.
Explore the commercial property for sale near you to learn more.