When investing in commercial real estate, there are many options for investors to consider. One option is to invest in raw land, which allows the investor a blank canvas on which to develop a unique or specific type of commercial property. Other ways to invest in commercial real estate include buying buildings or acquiring existing land that can be converted to commercial use. All of these investments have different advantages and risks, but each has its own unique benefits.
Before purchasing a piece of commercial land, investors should research the local infrastructure and zoning laws. This will help investors understand what is possible or not on the land, and it will also allow them to determine its value. Investors should know that the zoning laws on a piece of land will dictate what types of businesses can build on it. This is a major factor that many people forget about and end up losing money when they purchase a piece of commercial land only to find out later that it is not suited for their needs.
The zoning laws on a piece of commercial land will also dictate what type of utilities are available and how they can be installed on the property. In addition, buyers should make sure that the land is not located near any environmental hazards or pollutants. This can be difficult to determine from a map, so it is important to visit the property and see it in person to get a better idea of the topography of the area. Additionally, investors should ask for a site plan and be prepared to undergo an extensive inspection and testing process.
There are a number of expenses associated with buying commercial land, including a down payment and closing costs. In addition, there may be additional expenses depending on the intended use of the land. For example, if the land is to be used for a new commercial building, the cost of excavation and dirt work should be taken into account. Similarly, the cost of construction and the costs associated with running and maintaining the building will need to be considered as well.
It is important to note that a Commercial land sale will likely be subject to taxes. Buyers should consult a tax professional to learn what taxes are applicable and to ensure that all necessary paperwork is completed correctly. Moreover, buyers should be aware of any financing requirements for commercial land, as these are often different from those that apply to other types of real estate.
Investing in commercial land can be a great way to diversify your investment portfolio. However, there are many aspects of commercial land sale that are similar to those involved in purchasing other types of real estate. In order to avoid making a costly mistake, it is recommended that you work with an experienced commercial real estate broker.