location?" With interest rates at near historic lows, the answer for a sizable number of entrepreneurs is: probably so. "If you have the opportunity to either rent or buy, absolutely buy," says Scott Crossman, president of...
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location?" With interest rates at near historic lows, the answer for a sizable number of entrepreneurs is: probably so. "If you have the opportunity to either rent or buy, absolutely buy," says Scott Crossman, president of Orlando, Florida, commercial real estate brokerage Crossman & Co. "This is a great time in the market when you can borrow money on very aggressive terms. In the majority of instances, that makes great sense." Owning does offer many benefits. With each mortgage payment, you'll build equity in the property instead of just lining the landlord's pockets. That equity may be enhanced if the property value appreciates. And as the landlord, you control the space, deciding everything from what color to paint the building to which tenants-if any-to lease unused space to. You also control costs, since you can decide on financing and maintenance and upgrade schedules. And you won't be subject to rent hikes. Buying a commercial property generally requires a cash down payment of 20 percent of the value. If your property has other tenants, you'll need signed leases to show your lender. You'll also have to arrange for the property to be insured against damage or loss. Terms of the loan will normally be 15 years, with the interest rate pegged to a benchmark, such as the rate being paid by U.S. Treasury securities. Buying commercial property is a serious commitment that typically costs a lot of money, so you'll want expert legal, financial and real estate advice at every step.
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