News & Articles
What often stands between a buyer and seller match that seems to be made in heaven? Getting a mortgage. With stricter lending rules going into effect in 2014 and 2015, it has become harder for small and mid-size lenders to award conventional loans. Lender profit margins have also dropped in recent years.
As a result, more buyers and sellers are turning to creative financing approaches including lease options, land contracts, wraparound mortgages, and contracts for deed. Otherwise, the seller is forced to lower the property's price in order to find a buyer—something they might not be willing or able to do. Creative seller financing usually gives the seller 50-80 percent of the purchase price upfront and the remaining 20-50 percent over time with interest.
Coordinating the sale
Because these types of agreement are less common, not all real estate agents are familiar with how they work and when they are suitable approaches. As a buyer or seller, your best approach is work with an agent who has experience with seller financing and can bring parties together who will both benefit from this approach.
Like other kinds of investments, creative financing has an element of risk and an increased time commitment for the seller. This makes it especially important to avoid do-it-yourself approaches. As with other types of financing, working with a qualified and knowledgeable realty professional is the best way to coordinate a commercial property sale.
To learn more about seller financing in the Columbus and central Ohio area, talk with a DRK & Company realty consultant. Call 614-540-2404.
Leases come in two flavors: long-term and short-term. Unlike choosing between ice creams—vanilla or chocolate? What sounds good to you? —the choice between a long- or short-term lease can have lasting advantages or serious repercussions.
What's long, what's short? A short term lease is typically for a term of one to five years. A long-term lease can be five years or more. An important consideration is whether you need the promise of establishing and keeping a prized location or if you need the flexibility to grow or relocate.
Short term opportunities. With a shorter commitment, you have the flexibility to up-size or up-scale as your company grows. This is especially important for start-up businesses. However, with a short-term lease, the landlord can force you to relocate after the lease is up. Rents can also change dramatically at renewal.
Long term realities. When you sign a lease for more than five years, you are locked into a decision, good or bad. However, your commitment gives you more leverage. Landlords are typically more willing to make improvements for long-term tenants. Rent increases will be pre-established. And if the building should be sold, you retain your location.
When choosing between a long- or short-term lease, consider the following:
- Your growth potential
- Is the location a perfect fit?
- Economic trends
- Shared office space alternatives
- Renewal clause options
Still have questions about leasing options and negotiations? Call DRK & Co. to talk with an agent.
Looking for tips on renting business space? Where you locate your business, how much you spend on rent and what you get for your money are essential to your success.
Here are some good questions to ask yourself:
How much can you afford?
The importance of budgeting is universal. Looking at properties you can't afford can make the decision of where to rent all the harder. Keep your eye on the big picture and use projected financials to determine what you can afford.
How will the property and its location serve you?
Make sure the rental property's location and features are suited to your business. Do you require foot traffic or easy access to the interstate? Is there adequate parking? If customers rarely come to your place of business, do you need to pay for visibility? If customers can't get your products or services without walking in the door, do you need to be near similar businesses?
Will you be asking for improvements in the future?
As a renter, your ongoing satisfaction with a property will also depend on the landlord. Is the property in perfect condition? Are there improvements or modifications you will need? Getting a sense of who you'll be working with can help you in the long run.
Do you need more local knowledge?
In addition to helping you find individual properties, a realtor can help you become familiar with different communities and business districts, including the average cost of renting in different parts of your target area. Their knowledge is essential to finding the property that fits your business.
For help finding the best commercial rental property for your business in the Columbus, Ohio area, contact DRK and Co., a full-service commercial realtor. Call 614-540-2404 to schedule a consultation.
Looking to lease commercial property in the Columbus metropolitan area or nearby communities? As a full-service commercial realtor, DRK and Co. listings include a variety of different spaces, including:
- Medical office
Commercial real estate is our specialty. We not only help you find the best location and price point for your needs, we provide answers to all of the questions that arise while securing the property that is right for your business.
We will assist you with negotiating the lease agreement, improvements, and maintenance and repair terms--as well help you prepare for related expenses.
Our knowledge of the local market and relationship-building skills make DRK agents the right choice when leasing commercial property in central Ohio.
It's a big decision: whether to buy or lease a business property. Purchasing a property can save you money in the long run, but leasing can give you important financial and logistic flexibility.
Remember that no two businesses are alike. To properly weight the pros and cons in your individual circumstances, consider:
How much cash you will need to make the purchase. To determine this, you will need to do a cash flow analysis, including:
- Financing terms and closing costs
- Your income tax rate
- Costs associated with ownership but not with leasing
- The period of time you expect to use the property
- The value of the property now and post-use
Remember, first-year cash flow projections aren't a good indicator of whether you should buy or lease. It's important to consider if a lease will provide you with the following:
- The ability to stay in the location as long as you want
- Freedom to make needed changes to the property
- Tax savings
On the other hand, do you want to be a property owner at this time? Ask yourself these questions:
- Do you want to be responsible for maintenance?
- How long do you intend to stay at this location?
- Will you need the cash to grow your business in other ways?
- Will your credit rating support a mortgage?
Location is always an important consideration, including:
- Are the property values in the neighborhood on the rise or on the decline?
If you are interested in a property where the owner would consider selling or renting, you'll need to weigh these considerations. Knowing the answers will also benefit you if you are choosing between two different properties, where one is a rental and the other is for sale.
Need more help finding and deciding about a business property? Call DRK at 614-540-2404 for assistance from a full-service commercial realtor in Columbus, Ohio.