Investing in a commercial property is a huge undertaking. While commercial real estate investment tends to yield greater returns, it also comes with its share of risks. This explains the importance of making effort to get commercial real transactions right the first time.
Whether you are a first-time buyer or not, here are important considerations when investing in commercial real estate here in California:
Check the zoning and land use
The importance of understanding California’s commercial zoning code cannot be overstated when investing in commercial real estate. Failure to comply with any of these zoning laws can jeopardize your investment and result in irreparable damages.
As an investor, it is crucial that you obtain important documentation relating to the property’s zoning. Some of these include licenses (originals and copies), certificates of occupancy as well as permits. Be sure to research any past as well as potential future violations as well.
Research the title
Take time to get a clear picture of the commercial property you are about to put your hard-earned money on. This is where researching the title to ensure that it is clean comes in.
Does the property have any title issues? Has it been used as collateral for some loan? Title issues, however insignificant, can lead to serious issues down the road.
As an investor, you will be subjected to similar restrictions as the seller as far as the property’s covenants, easements and other encumbrances as the seller. You can always find the property’s encumbrances in the county records.
Commercial real estate investment involves multiple legal and financial complexities. Find out how you can protect your rights and interests.