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Commercial property: What needs to be considered when buying?

What needs to be considered when purchasing?

A commercial property is a piece of land that is kept in a land register. It is spatially separated from other plots and is located in a commercial area. It is characterized by the fact that mainly commercial enterprises are approved. In addition, housing units are only allowed in exceptional situations. It is necessary to check whether these properties are also suitable as investment and investment properties for off-market properties.

The local location of commercial land

Commercial properties can also be located in a mixed area. Residential units and commercial enterprises are permitted here. They must not significantly disturb the residents. Building living space on a commercial property is only permitted under certain restrictions. Authorisation is conceivable, for example, if an accommodation is to be created for a caretaker, or manager.

Forms of investment real estate

  • Houses as investment properties
  • Apartments as investment properties
  • Commercial real estate as investment real estate
  • Indirect investment in investment properties

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What can be built on a commercial property?

How land can be used in Germany is regulated by the Building Use Ordinance (BauNVO). Section 8 refers to the development of commercial land. According to this, commercial plots are intended for development with commercial enterprises of all kinds, warehouses, storage areas and public enterprises. It also mentions commercial, office and administrative buildings, petrol stations and sports facilities.

EXKURS: Please feel free to offer us your properties. Together with you, we work out an investment plan and research suitable investors for you. We specialize in off-market investment properties throughout Europe. If you have a real estate agent, be sure to check out our real estate franchise offer.

Exceptions may be made for the following structural uses:

  • Housing for supervisors and on-call persons as well as farmers and managers
  • Facilities for ecclesiastical, cultural, social and health purposes
  • Amusement venues

It is important, however, that these are subordinated to the commercial share in the points of the used floor area and building mass.

How expensive is a commercial property?

The price of a commercial property is determined by supply and demand. The high demand for a commercial property is determined, inter alia, by the following factors:

  1. The location: The value of a commercial property is largely determined by the location. The better this is, the more likely potential buyers are to pay a high price. The quality of the location is determined by the infrastructure provided. Proximity to large cities and qualified personnel is also taken into account.
  2. Adjacent commercial units: The commercial neighbours also have an influence. If these affect the operation of other businesses, this reduces the value. If, on the other hand, there are synergy effects, this leads to an increase in prices.
  3. The current market situation: Land prices are influenced by interest rate policy and developments in financial markets. Low interest rates have a price-driving effect, while high interest rates can depress prices. If the companies are doing well, the demand for commercial property is increasing. This is reflected in the prices.
  4. Additional purchase costs: The purchase of a commercial property is always associated with additional purchase costs. Depending on the state, between 3.5 and 6.5 real estate transfer taxes are payable. Since the purchase of a commercial property has to be notarised, notary costs are incurred, which are approximately 1.5 of the purchase price. In addition, a land register entry must be made and, if necessary, a broker must be paid for his work.

Buy commercial property: the following must be observed!

Buying a commercial property is a big step and ties up a lot of capital. For this reason, you should take sufficient time to plan. With our checklist you avoid errors:

  1. Check the location: Whether the location is suitable for your business depends on the planned operation. A gastronomic trade benefits from local residents, running customers and similar businesses. A production facility, on the other hand, of a quick accessibility in a favourable industrial location. So, before you buy, think about what criteria your preferred location needs to meet.
  1. The right size: Finding a commercial property is a challenge and can drag on. Nevertheless, you should not lose patience. Do not buy a commercial property that is too large or too small. Calculate exactly which size is ideal for you.
  1. What is to be built?: When buying the commercial property, you should know exactly what you want to build on it. Discuss your project with an architect.
  1. Check the construction plan: Make sure that your project can be realized on the commercial property. To check if there are any restrictions or restrictions in the development plan.
  1. Check whether the commercial property is developed: Make sure the commercial property has electricity, water, sewage, internet and other connections. What is required for your business?
  1. Is there room for parking: Make sure that all required employees can find a parking space near the premises. If there is a public transport connection, you will need less parking.
  1. Surveying certificate: Take a look at the survey certificate. Check where the boundaries of the commercial property run and compare them with your documents.
  1. Compare the square meter price: Check that the square meter price is appropriate for location and size. Compare it to other commercial properties.
  1. Compare the square meter price: Make a financing plan and calculate whether the purchase of the commercial property pays off for you.

Do you have any questions or would like to test the real estate franchise?

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The E1 Investments concept offers a proven system for the solid development of a business as a broker and owner of a real estate business. E1 Real Estate has the infrastructure and operating systems that enable us to offer first-class services with a team of brokers. You are investing in the market of the future.

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Real estate prices analysis for 80 locations throughout Germany

Location analysis

E1 Holding offers location analysis for real estate for almost 100 cities nationwide in all federal states. Our well-trained experts for real estate and investments as well as off-market real estate in various locations and sizes take a professional and authentic look at the real estate market at the respective location. In doing so, we determine realistic and continuously updated real estate prices depending on the market situation as well as a corresponding real estate forecast. We are constantly expanding the list of alphabetically ordered locations and intensively expanding the data base for more and more cities. In addition to investors and investors with budgets of all sizes, our nationwide location analyses are also valuable for housebuilders when deciding on a location. Click here

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