If you own your own business, chances are you may have considered buying real estate — a store, warehouse, or office building, for instance.
Buying business property can be a great investment for business owners, even small business owners. However, just like buying a home for your family, you need to be careful to be sure that you won’t get burned.
- Don’t buy beyond what you can afford. Yes, if you buy an office building with other units in it, you will be getting income from your tenants. But also consider that especially in a down economy, some units may be vacant for long periods of time, and other tenants may develop problems paying their lease. In other words, don’t count your chickens before they hatch, and be sure that the investment is one you can afford to make, even if everything doesn’t work out exactly the way you want it to.
- Work with a reputable agent and lender. Just like when you buy a residential property, you will want to find an agent you can trust, and be sure that your broker is qualified under the SAFE Mortgage Licensing Act. This was signed into law in 2008 by the Bush administration, requiring all brokers to pursue special mortgage training and pass a licensing exam. They can enroll in programs for mortgage exam prep, but ultimately they have to pass the licensing exam on their own merits.
- Hire a tax accountant to help you with your business taxes. Business property is a huge expense on your taxes. Be sure you take the right deductions, and hire an accountant who specializes in doing taxes for property-owning small businesses.
If you do it right, owning real estate can really be a beneficial investment for your business!
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