Guide to purchasing commercial property

Guide to purchasing commercial propertyImage Credit: Supplied

While residential property is cheaper, some investors prefer putting their money where they can get huge returns: commercial property. Purchasing commercial real estate (office, retail, industrial) to let involves more risks, foremost of which is the higher vacancy rate. How to make the right investment decision?

• Advice. Employ a RERA-certified real estate agent to provide you with a number of options and help you identify the right property for your budget. Experts also recommend seeking the advice of a lawyer to guide you through the legalities of signing a contract or drawing up a lease agreement, and an accountant to sort out your finances.

• Location. When targeting an area to invest in, think where businesses get the most exposure, e.g. an office building in an established mixed-use project. Remember though that properties in the central business district have higher values than those located far from the center. Also factor into your decision the convenience the property offers tenants and their suppliers and customers, i.e. proximity to public transport like the Metro, easy accessibility to the major roads, the business district, and airports and seaports.

• Due diligence. Be it a newly released property or an existing one, due diligence is vital when procuring a unit. Check the condition and the quality of the property inside and out. Enlist the services of an inspection company to conduct “snagging” to ensure it complies with standards. Also take into consideration the building’s parking space and road access.

• Financing. Once you have zeroed in on a property, take time to shop for financing options that can range from loans to mortgage. In the UAE, only a few companies are willing to lend for commercial investments so think twice about this.

• Property management. Your job is not finished after you have signed the sales agreement. It is always wise to hire a property management firm to take care of the nitty-gritty of managing your property, from finding tenants to collecting rents to maintaining the property and its premises.

Handy Hints
• When picking an area to invest in, check its convenience factor
• Hire a property management firm to manage your investment
• Get an inspection company to do snagging work of the property

Click on Managing property for more advice in purchasing

Source: Ellen Joyce Soriano, Special to Properties
The writer is a freelancer


For Rent


View more properties

For Sale


View more properties