The Pros and Cons of Buying Florida Commercial Real Estate (and Why You Need an Experienced Law Firm)
When it comes to buying real estate in Florida there are pros and cons. In our law practice, our experienced attorneys focus on both residential and commercial real estate dealings. There are significant differences, however, between these types of purchases. The nuances in these types of real estate transactions are just one of the reasons why you want to work with an experienced real estate law firm in your local community.
The differences between commercial and residential real estate transactions and Investments can be both unique and significant. In our experience, commercial property may be a more lucrative investment, but it may also have more risk involved than a residential real property purchase. Our attorneys work alongside our clients to discuss the pros and cons of any real estate transaction, whether commercial or residential, which is a significant advantage in today’s competitive Florida marketplace. Let us share a few pros and cons to buying Florida commercial real estate today, as well as a candid discussion of why you need an experienced law firm on your side.
The first pro that we want to share with you is that there is a high potential for your commercial real estate investment to generate longer lasting benefits for you in Florida. The state of Florida has favorable tax structures that can make it appealing to any commercial business investor. The pros are realized in a few ways including, but not limited to, higher potential income over residential and the duration of occupancy since most businesses want to stay in the same location for a period of years.
The con of these potentially favorable benefits is that your commercial real estate investment may have more risk in today’s marketplace. There are Florida businesses that cannot pay their rent as the pandemic continues. Commercial purchasers and renters may also be looking for specific ventilation and preventative maintenance from their landlords. It is important for you to consider this, as well as what is already in place in the existing structure you would be purchasing.
A second con may be the initial investment. Most Florida commercial property purchases require more upfront than a traditional residential closing. They also may need more maintenance to get them up to your standards, or the standards you need for the renter you are trying to attract to the property. That said, there is a pro in here as well. When you find a Florida commercial property that you want to invest in, there should be records that you can evaluate during the offer process if it was used previously for commercial purposes. You can work with your attorney to evaluate the history of the building to see what the previous owner was able to generate per month, the maintenance involved, and any special issues that need to be addressed before the closing.
The last pro that we want to share with you is related to the future sale of your Florida commercial property. A commercial property that has been rented for a period of years has a proven track record and can be easier to sell to another investor. During your duration as the owner of the property you will want to keep detailed records so that you are able to share the income the property generated, the maintenance required, and the insurance you needed, as well as any of the unique steps you took to generate loyalty in your long-time tenants. The con almost always speaks for itself in this scenario: it can be hard to sell any real estate, no matter what it is or how much income it generated. When thinking about your Florida commercial real estate purchase, you want to be sure that your deal is not contingent on a future sale unless that is in your current business model.
Remember, Watson Sloane is the leading real estate law firm in Orlando. We understand that the primary goal of our clients is typically to make and close the deal, so we use innovative, yet practical, solutions to achieve those objectives. If you are ready to close your next real estate deal, we are ready to help make it a smooth and cost-effective process. Contact us today to learn more about what we can do for you.