When acquiring commercial real estate, one thing you may consider is the difference between buying land and building from the ground up or buying an existing building and renovating it. Which one is going to be better for your company? Are there any advantages to either strategy?
Naturally, it depends on numerous factors, such as the type of business and where the real estate is located. If you are buying property in an urban area, for instance, there may not be any empty land. Your only option may be to purchase a building and either demolish or renovate it. Below are two things to consider while making this decision.
Do you need a customized building?
One of the advantages of building from the ground up is that you can have the structure constructed exactly as you want it. If you need a high level of customization or specific, unique features for your business, this may make the most sense. You’re not confined to any previous design elements, so you have full control over the end result.
Is the renovation in the right zone?
Another thing to consider — in both cases — is the zone where the property is located. If you’re trying to buy land, but it’s zoned only for residential use, you can’t have a commercial property or a retail business there. You would need to get a variance.
If you’re buying an existing building, you may be able to find one that is already zoned correctly for your commercial operation, so then you just need to renovate the property to work for your specific business. You already know that it will satisfy these legal requirements.
Determining how you want to proceed with real estate is very important. Take the time to carefully look into all of your legal options.