Although residential real estate can be a sizeable investment, commercial real estate can be even more so. If you’re wondering, “When do you need a commercial real estate appraisal?” the time to do so would be before you purchase a piece of property, or after making improvements to your investment. Finding ways to maximize the value of your property investment can be crucial to making a future profit as well. We explore the ways you can do this below.
When Do You Need a Commercial Real Estate Appraisal? When You’re Looking Into Multi-Use Zoning
Multi-use zoning can be immensely valuable to a commercial piece of property. It’s exactly like it sounds, zoning that allows for more than one kind of use which makes it worth more because of the flexibility it offers. As a typical rule, the wider the breadth of uses for a building, the more valuable it is. A commercial real estate appraiser can help you choose a multi-use property that offers the best investment.
Commercial real estate that is dedicated to one purpose, like manufacturing, limits your number of future buyers. Only businesses that do manufacturing will be able to set up shop there so the more types of industries that can work on a property the better.
Purchase a Property With Space That Matches Market Demand
Bigger is not always better. This is surprisingly true with commercial real estate. Although larger space might mean a bigger company, there are fewer organizations that can fit inside large spaces when you sell.
Instead, it’s best to buy space that reflects what the current market demand is. Doing so means securing a wider variety of interested companies that can use the space. Most entrepreneurs don’t have the budget to fill big spaces and the property, in general, is just harder to resell.
Consider Investing in a Property Space that Has a LEED Certification
“Green” buildings can be especially good investments right now, particularly ones that have been awarded a Leadership in Energy and Environmental Design (LEED) certification.
“LEED certification provides independent, third-party verification that a building, home or community was designed and built using strategies aimed at achieving high performance in key areas of human and environmental health: location and transportation, sustainable site development, water savings, energy efficiency, materials selection, and indoor environmental quality.” – cagbc.org
Although these properties typically have higher costs upfront these costs can be made up for by the efficiency of the building. Energy bills will be greatly reduced from that of a normal building, and the design of the structure itself can often improve employee productivity and air quality.
Alternatively, buying a used building that has been LEED-certified and retro-fitting it can also be another option. If you’re looking for a more budget-conscious choice you can still make the property more “green” by adding renovations like a grass roof or improving your air quality system.
Prevent Bad Investment Decisions by Working With a Commercial Real Estate Appraiser
Of course, a great way to make a good commercial real estate decision is to prevent making a bad one to begin with. Commercial real estate appraisers are experienced in understanding what makes one building more valuable over another and can help guide you to make the best choice for an investment.
Commercial real estate investments are significant, so it’s important to buy a property that continues to be valuable over many years before you sell. Following our tips above will ensure your commercial property continues to build in worth as times moves forward.