You can't wait to purchase your first commercial property in Virginia, but you're concerned about whether it's the best place to invest. Don't worry - your future looks promising if you're investing in property.
Research shows Virginia's office, industrial, and retail markets weathered the COVID pandemic. Office rents increased, retail remains a key economic driver, and warehouse space remains in high demand.
Successfully buying Virginia rental property as a commercial property investor requires excellent due diligence. Let's explore the ins and outs of commercial property due diligence.
Commercial Property Due Diligence: Files
An important step to take before you buy commercial property is to organize all property-related documents. Create a detailed building portfolio. The portfolio should include the following documents:
- City records
- Zoning documents
- Engineer reports
- Environmental reports
- Tax forms
- Inspection histories
- Property title
Consider making these documents readily accessible by putting them in the cloud. Using cloud technology is especially important if you work with several partners and team members. This technology will make it easy for authorized users to view or add to folders anytime.
Investigate each file thoroughly to ensure you understand what's involved with your target property. Use this information to determine whether the property would make a good investment versus other options.
Another important part of commercial property due diligence is securing financing for your real estate deal. Talk with a lender about your financing options.
Remember that lenders may be picky regarding property qualities and conditions. Asses your target commercial property before trying to secure funds to buy it.
Lenders also usually require each partner to submit several documents. They'll use this information to determine if you're reliable enough to repay a loan. These personal identification and accounting records include the following:
- Driver's licenses
- Personal financial statements
- Tax returns from the past two to three years
Suppose you plan to upgrade the commercial building. Consider submitting a detailed overview of your plan for the property. A lender may be more willing to give you financing if they believe your property will be attractive, high-value, and profitable.
Yet another important step in buying a commercial property is to inspect it in person. Hire a property manager and broker to help with this process. Your inspection team may also include a contractor, an architect, environmental inspection experts, and building inspectors.
Get as many professional assessments as you can. More details will help you determine if the property is an excellent investment and what you can do to enhance the property.
How We Can Help Property Investors
Commercial property due diligence includes gathering all documents pertaining to your property before you buy it. Another important step is collecting the necessary documents to pursue financing for your deal. You should also inspect the commercial property carefully.
At PMI of Fairfax, we can help you grow your real estate business through quality property management. Our services range from property maintenance to tenant management.
We can also help you exercise proper due diligence when owning property in Virginia. Schedule a consultation today to discover how our services can help you expand your business long-term.