When buying industrial real estate you must do your homework. Let us assume you found a piece of industrial real estate that you are considering purchasing. Go around to the owners and managers in the area and ask what they like and dislike about the area. You will be surprised at how much you will learn from them. A must is finding out what the vacancy rates are in the vicinity. You do not want to buy a piece of commercial real estate or industrial real estate and have low vacancy rates.

Five questions to ask these individuals are:

1. What were the strong points of the people that are selling the real estate? In other words, their feelings towards their landlords.
2. Do they know of any businesses moving into the area? If they are moving in you will have more tenants.
3. The income level of the people in the area. This will tell you how much spending power will penetrate the area.
4. A very important question concerns the volume of business in the area. This is especially true if you have retail space or a restaurant.
5. You must get the best advice possible when looking at  industrial real estate for sale.  That is why you need to work with a commercial real estate broker.

A commercial real estate broker will be able to confirm and supplement the information you obtained by asking questions. A good commercial real estate broker will be able to show all the pertinent financial statements. Financing for the purchase can also be assisted by working with a good commercial real estate broker. This is a big investment for you and you must do the legwork to make sure your money is well invested.

Cleveland Realtors are often asked whether it is better to own or lease office space, industrial real estate and retail real estate. Broker to broker, the answer is the same – it depends.  Here are several factors Ohio Commercial Real Estate Brokers suggest you consider.

Consider cash outlay: Generally, you don’t need to put out as much money upfront when you lease a Cleveland office space as you do when you look at commercial property for sale.   A quick example: A commercial real estate broker is looking to sell a $500,000 Cleveland Building. Someone leasing the space might pay around $4,000 monthly in rent. Someone looking to buy the same commercial real estate in Cleveland would have to put about $150,000 down, and also would have had to pay for an appraisal, building inspections, loan fees and other costs.

The fixed/variable cost factor: Buy a Cleveland property and you have a good idea of what your costs are going to be year after year, especially if you get a fixed-rate loan on the property. Lease and your costs may change when your lease term expires.

Plan for growth Buying land for sale in Cleveland or commercial real estate for sale in Cleveland that’s just the right size for you now can look attractive. But what will you do if your business and your space requirement grows over the next few years?

Outgrowing a space doesn’t have to be a financial crisis.  A retail real estate broker can help you avoid the cost and hassle of moving by simply leasing more space in the building you already  occupy.

Figure the appreciation factor: Buying commercial real estate in Cleveland puts you in a second business: real estate investing. If you’re in an area of appreciating land values, eventually you could sell it at a profit. But if you own industrial real estate or commercial real estate in Northeast Ohio with more space than your business needs, you’ll probably end up renting to others, thus becoming a landlord. It can all be profitable, but it is more work than simply leasing space.

Consider  tax issues: As usual, there are tax issues to consider. Businesses routinely can deduct the full amount they pay in rent. Owners of commercial rentals can write off repairs immediately, but improvements to Ohio industrial real estate have to be deducted over 39 years. Depreciation on Cleveland commercial real estate also is taken over 39 years.

Getting more help

In general, leasing tends to appeal to businesspeople who don’t want to make the kind of large upfront investment required with a purchase, who aren’t really sure how much space they’ll ultimately need and who simply don’t want to have to deal with the responsibilities of owning a piece of commercial property. Buying is going to make more sense for businesspeople who are more established, who want to be in one location for several years and who have the financial resources to take on a significant real estate investment.

Talk with one of our Cleveland realtors, commercial real estate broker, or retail real estate broker for more information.

NAI Daus specializes in Commercial Real Estate in the Greater Cleveland Area.  Some of the special services for Commercial Realestate Cleveland Ohio include:

• Commercial Rentals
• Industrial Real Estate
• Ohio Industrial Real Estate
• General Commercial Real Estate Cleveland
• Cleveland Building
• Retail Real Estate Broker

To find out more about our various Real Estate Services for commercial use in Cleveland, Ohio, visit www.naidaus.com