Finding the right office space or a showroom space is not an easy task. It involves a long checklist and research. These include identification of location, neighbourhood profiling, budgeting, landlord history, short term & long-term plan, monthly maintenance charges, age of the building, co-owners and other tenants in the building to legal verification which includes scrutinising the title deed, checking property tax & other over-dues, legal encumbrances etc. This is an exhaustive and time consuming process.
While you may be on the lookout for a property for commercial use, we have shared some basic mistakes which most of buyers/tenants make in the process of search of an ideal commercial space. Identifying and correcting these will help you save considerable time, effort and money.
Key mistakes to avoid
1.Failing to research
Research is the key to any real estate decision and many individuals fail to spend considerable time in understanding the market, location, businesses in vicinity, connectivity, objective mapping, government acquisition to name a few. Failure to do so can dilute your investment, for you could discover aspects that may bring down the value of your property, or even worse, lead it to be a dead investment.
Research on every aspect of the property – major or minor such as type of the building, approvals, previous ownership and history of the developer etc is crucial for an investment. In such cases it is best advised to make use of a qualified real estate professional.
Documentation is perhaps the most important factor to consider while getting into a real estate transaction. There is a possibility buyers/ tenants may ignore certain documents, fail to read the contract in its entirety and this could result in loss of money and the property.
There are a number of instances where people have been caught unawares due to counterfeit documents. Scrutinising the documents to check if they are legitimate and up to date is a mandatory task.
The main purpose for people to select a property in a commercial location is to generate profits for the business and if it is an investment, the property should also yield good appreciation. Most of tenants or buyers fail to calculate the costs and incorporate them in the working.
Under estimating the costs related to developing, approvals, constructing, maintenance etc can land one in trouble. Also taxes, government charges and registration fees should be kept in mind before getting into a property transaction.
4.Rushing the deal
The most common error is jumping the gun to close the deal. While it may be understandable that most buyers / investors / tenants are too eager and are in a rush to sign the dotted line, rushing up without adequate checklists can have its own consequences.
Staying calm and patient during a transaction is of utmost importance as this added time can help you identify lot more relevant information about the property, its owners, its history and also possibly uncover a better deal.
5.Doing everything on your own
A few people think that they know it all and can close a real estate transaction on their own. While they may have a fair bit of knowledge, the process may not go smoothly as expected and they most generally have nobody to turn to in case of an unfavourable real estate deal.
It is always advisable to make use of an expert. It is best advised to employ a professional real estate agent. An agent is an advisor and advocate and handholds the entire process, is an expert in the local micro market and deals on a daily basis and knows the market in and out.
Satisfied real estate investors are those who did not mind shelling professional fees and engaged subject matter experts because they simply did to want to take a chance with the savings of their lifetime! Similarly it is imperative to identify a real estate agent of repute, good past record and a great client servicing team. This helps clients focus on their core business while the experts go about their job in assisting the clients to close the deal in a seamless manner.
Amit Damodar (MRICS)
Partner, Chattels Realty
National Vice President, NAR India
President, NAR INDIA CREAA, Chennai
Karthik@chattels.in | +91 90031 34448 | www.chattels.in | @ChattelsRealty
Chattels Realty is an end to end all vertical Real Estate Services company (PAN India & Headquarters in Chennai) with a wide network of 8 cities, 225+ professionals, 21+ million sq.ft. of space leased & 34000+ happy clients.