Commercial property might be a great choice if you want to invest in real estate. In this blog, we present 10 questions to help you find the right commercial property in New Orleans.
There are many types of commercial investment options. You can buy office space, retail, manufacturing space, and more. You can take a creative approach, such as purchasing a medical building and equipment, and then lease the space to doctors who need a place to set up. Or you could use a warehouse to develop a space for artists to create and sell their works. The list goes on and on.
In addition to bringing in extra cash, you also have the opportunity to invest in something you love. Continue reading to learn more about determining the commercial property that is right for you in New Orleans!
10 Questions To Help You Choose The Right Commercial Property in New Orleans
Question 1: What is your budget?
Commercial property comes in a wide variety of prices. It’s vital to understand what you can actually afford before considering a commercial investment in New Orleans. You will need to determine your expenses, GRM (gross rent multiplier), and what the taxes will be like. This will help you determine if a property is worth it.
Question 2: Are you buying for your business or as an investment?
If the building is for your business, the decision you make is more personal. The building will need to meet all of your needs in areas such as commute time, aesthetics, and layout. You may want to consider purchasing a smaller building and leasing out some of the space to offset the cost of your loan.
If the building is for investment purposes, the proximity to where you live becomes less important. It is unlikely that you will need to visit the building very often when you have good tenants in place.
Question 3: Are there leases with other tenants currently in place?
This can be a good or bad thing, depending on who they are and how much their rent is. Thoroughly review the lease, understand the policy for rent increases, the ability to modify the space, and more. You could find yourself with low rent prices and costs to repair units that were customized by tenants if the previous landlord doesn’t have the proper paperwork in place.
Question 4: How much time can you dedicate to the property?
This will help you decide between a small storefront or a 5-story office building. In addition to the tenant/everyday issues that occur, more time will need to be spent on maintenance with a larger building. It can become a full-time job! This brings us to our next question…
Question 5: Will you need a property manager?
Hiring a professional is a must if you aren’t experienced in handling large commercial properties, at least until you can manage on your own. They can help you determine costs and ways to bring in the right tenants. Not all property management services are the same. Compare a few, not only for cost, but to find out what they can help with.
Question 6: What’s your final goal?
Are you trying to achieve a specific profit within an established time-frame? Compare the ROI on many buildings before making a final purchase. Maybe you should “flip” commercial property as opposed to holding long-term. Or maybe you should consider a mixed-use building in a more on-demand area.
Question 7: Are you prepared for repairs on a larger scale?
If you have ten tenants, count on 10x more calls to the landlord, ten sinks that can flood, ten security deposits to manage, and so on. With a large building, if someone isn’t working on-site full-time, count on many more calls to the local handyman. On the flip side, something like a roof covers all ten tenants at once. Upgrading this will have an effect on all of the tenants at once.
Question 8: What is the location like?
You may not attract great tenants if the location is in a bad area. Depending on the types of businesses, consider foot traffic and accessibility. Can you see it from the main road? Is there sufficient parking? You should also consider proposed development plans to see what the future of the area looks like.
Question 9: Will the time of year affect your investment?
In some parts of the country, restaurants or service-related fields see a spike during certain times of the year. For example, many restaurants see an upswing of patrons during summer months. This is also the time you will see many new businesses popping up, all of which need a place to operate.
Question 10: Do you have a strong team?
An investor is only as strong as the team they work with. Hiring a great handyman, inspector, title company, accountant, and attorney will all help you make your investment dreams a reality.
If you are interested in buying commercial property in New Orleans, we can help you find the property that is right for you! Send us a message, or give our team a call today! (504) 224-9066