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"The City of Columbus has helped our company immensely with job creation tax credits (which have allowed us to create more jobs), insight and feedback," says small business owner Tanisha Robinson. "I can't think of a better place for entrepreneurs than Columbus."
Are you considering launching a new business? Are you expanding or relocating an existing one? The City of Columbus has several programs consisting of a mix of federal, state and Franklin County tax incentives, and loans and grants, which can provide gap funding/assistance in realizing your dream.
Businesses in the Columbus metropolitan area benefit from:
- No personal property tax
- No inventory tax
- No state corporate income tax
Tax Incentive Programs
Several programs are available to assist new and existing businesses complete commercial, industrial, office and residential development projects. These incentives include:
- Job Creation Tax Credit – This refundable tax credit is given to companies that create at least 10 new jobs within 3 years. The credit is applied toward the company's commercial activity tax liability.
- Ohio Community Reinvestment Areas – This program provides qualifying companies with an exemption of up to 100% of improvement value for up to 15 years on property taxes. It's designed to offer real estate tax abatements on the increased value of real property improvements. Today, this program is used as an economic development tool to help businesses in expansion.
- Ohio Enterprise Zone Program – This program gives real property tax incentives for businesses that expand in or relocate to Ohio. The Enterprise Zone Program helps stimulate economic development and allows Columbus to offer competitive business recruitment packages to prospective businesses. Certain qualifying businesses might be eligible for additional benefits, too.
Columbus offers businesses a variety of loans that can assist area companies as they grow and create jobs in Ohio. Some loan programs include:
- Research and Development Investment Loan – This fund provides loan financing between $500,000 and $5 million to Ohio businesses for projects research and development activity projects.
- 166 Direct Loan – This loan provides money for land and building acquisition, construction, expansion, or renovation, and equipment purchases for eligible businesses.
Innovation Ohio Loan Fund – This fund was created to assist existing Columbus, OH, companies in developing next-generation services and products. It's good for acquisition, construction, and related capital costs of technology, facilities and equipment purchases.
The State of Ohio also offers Columbus businesses grants to promote economic development, business expansion and job creation. Some available grants include:
- JobsOhio Economic Development Grant – This grant provides funding for businesses that create new jobs.
- Roadwork Development – These funds are allocated for public roadway improvements, including engineering and design costs. Projects typically involve manufacturing, research and development, high technology, corporate headquarters and distribution activity. To qualify, the business must create or retain jobs.
Additional incentives might be available at the municipality or Franklin County level. These incentives include:
- Performance-based incentives or job-growth incentives
- Additional workforce training assistance
- Loan programs
The City of Columbus is committed to ensuring your success – the city cannot be successful without entrepreneurs like you. If you're looking for real estate to start your business in Columbus, the experts at DRK Realtors can help. Contact us today.
Commercial real estate leases might seem daunting, especially since they're a long-term commitment and a heavy investment. But, they're not as complicated as you might think.
Generally speaking, there are three main types of commercial real estate leases:
- Gross, or Full Service, Leases
- Net Leases
3. Mortified Gross Leases
All these leases have one thing in common – they all provide a base rent with options for who pays for which operational expense. Here's a breakdown of the different lease types:
Gross/Full Service Lease
With this lease option, the tenant's rent covers all operating costs, including expenses like utilities, maintenance and property tax. The landlord pays these property operating costs with the tenant's rent. While the base rent might seem relatively high, it's the only cost to the tenant.
Many tenants prefer a gross lease – the rent is fixed, and they don't need to worry about operational costs. In the summer, for instance, you won't spend any more money as energy consumption increases.
A gross lease is easy for the tenant – they can forecast expenses and concentrate on growing their business.
You'll find gross leases mainly for retail, industrial and freestanding commercial properties.
This commercial real estate lease is highly adjustable. While the base rent might be lower than a gross lease, a net lease requires the tenant to pay fixed operating expenses, like insurance, maintenance and property taxes. The 4 types of net leases include:
- Single Net Lease: The tenant pay rent, a portion of the property tax, and utilities directly. The landlord assumes building expenses.
- Double Net Lease: Similar to a single next lease, a double net lease requires the tenant to also pay a portion of the property insurance.
- Triple Net Lease: This is perhaps the most common lease agreement – on top of their base rent, the tenant also pays for some or all of insurance, property tax, and common area maintenance.
- Absolute Triple Net Lease: This is probably the most uncommon commercial lease. In this magnified agreement, the tenant assumes all costs – they have sole responsibility of the building. While the tenant basically "owns" the building without buying it, they are also responsible for all property damage and catastrophic instances.
Modified Gross Lease
This lease offers fair middle ground for both tenants and landlords. A modified gross lease fosters a range of negotiations and dialogues around operating costs. Here, the lease rate remains fixed – even if costs increase or decrease.
Before signing a lease for your next commercial real estate space, read the proposed agreement carefully. Clarify with the landlord exactly what expenses you are responsible for.
Location, location, location – one of the biggest questions you'll need to answer with any new business is where you will locate it. Will you work from home, or set up a commercial space?
A home-based business certainly has some advantages. For instance, your commute and rent costs are nonexistent. But, you'll also sacrifice valuable business opportunities, like "walk-in" customers, brand development and community outreach. There comes a time in every small business or startup when working out of a home office becomes more of a hindrance to growth than a cost-savings measure.
Consider these top 5 reasons to choose a brick and mortar location for your new business.
1. Room to Grow
Avoid growing pains by investing in more space than you have at home. This gives your business room to expand when the time comes.
2. Professional Relationships
Many business analysts believe that a brick and mortar location offers a more professional and credible feel.
3. Room for Employees
When your business expands, you'll need a larger workforce. A commercial building will give you room for your new team members and provide everyone with enough private space to be productive.
4. More Energy
When you hire more employees – or even work out of a shared workspace – you'll have more people around to fuel your creativity. Sometimes, just being around and talking with others can spark a great new idea.
5. More Focus
Leave your home concerns where they belong – at home. When you leave the house to go to your office, you'll have more time and energy to focus on your workday and foster your business development.
Only you can determine what work environment is the most beneficial to your business, and where your work-life balance will be ideal.
When you decide it's time to expand out of your home, DRK and Company can help. We're your commercial real estate specialists in the Westerville, OH, community. Contact an agent today at 614.540.2404 to find the right brick and mortar location for your business.
For over 40 years, the commercial realtors at DRK & Company have practiced their unparalleled experience in land acquisition and development, property management, and the sale and lease of all types of commercial property. Here are the top 5 reasons you need to work with a commercial realtor on your investment.
1. Save Time
Many of our clients wear too many hats already. We can alleviate the pressure of time-consuming tasks, like compiling and reviewing listings, calling listing agents, scheduling property tours, and staying on top of lengthy negotiations – just to name a few.
2. Save Money
Perhaps most importantly, we save our clients money. Our commercial real estate agents have the skills to negotiate the best deal on all ends of the transaction. We can even help you navigate the small nuances of a lease that can save you thousands of dollars over time.
3. Listing Access
Some of our clients don't realize that commercial real estate listings are not as centralized as residential real estate. Because there are so many transactions and property types, commercial real estate has several different listing platforms – only a handful of them are open to the public. You might not have access to a majority of the market's available properties without enlisting the help of a commercial real estate agent.
4. Market Specialization
Our commercial real estate agents have market knowledge and expertise that our clients might not. After all, it's our job to stay on top of the trends in our specialization. We perform market analysis – both on paper and in the field. And we constantly keep up with supply and demand cycles of commercial real estate in the Columbus, OH region.
We pride ourselves on our integration with the Columbus community. We are in close touch with our market's movers and shakers: property and business owners, investors, colleagues, etc. And finally, we share our wealth of contacts with our clients.
Contact DRK & Company today to take care of all your commercial real estate needs. After all, there are only so many hours in a day, and we take our commercial real estate business as seriously as you take yours.
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.