The commercial real estate market has had its ups and downs in the past few years, and analysts expect similar trends in the near future.
As a commercial property owner, it's never been more important to maximize your profit from your investments. This starts with getting an accurate commercial property valuation.
If you haven't attempted to value your commercial property yet, read on. We'll share five of the most important elements in any reliable assessment.
1. The Location
Commercial properties are more in demand when they are in the best locations in Chattanooga. This includes factors like:
- How close the property is to similar businesses
- A cluster of companies in a particular industry (like retail)
- Proximity to good road networks and public transport
- Amenities that are popular with a workforce
- Other practical aspects like plenty of parking
It's worth thinking about commercial districts that are up-and-coming. If there is lots of commercial development in the area, this could positively impact your commercial property valuation.
2. The Condition of the Property
Commercial property buyers want to see a building and interior in excellent condition.
It means they can operate their business from day one without the hassle and expense of renovations. Therefore, a commercial property's condition will always be a factor in the valuation.
Commercial buyers tend to want flexible interiors that meet a range of needs, and they want a sound building structure. For some business owners, factors like unique architecture could also be vital if they want to impress visitors.
3. Current Market Assessment
The economy is one of the most significant factors shaping any commercial valuation. During a recession, businesses won't expand and are less likely to move premises, which leads to a drop in demand and lower asking prices.
That's why it's always essential to check market data and economic forecasts when evaluating. Look at local unemployment rates, interest rates, and inflation. And keep an eye on the top financial and national news stories.
4. Regulatory Factors
Commercial property owners love to invest in buildings they can expand alongside their business. Yet sometimes, regulatory issues can get in the way, like local zoning laws dictating the purpose of a building.
When valuing your commercial property, consider regional and state laws. Is your property zoned for commercial use, or is it strictly a building for residential purposes?
5. Valuation Methods and Income Potential
When establishing your commercial real estate worth, don't forget that a buyer might be an investor looking to rent the property.
In that case, their primary concern will be the income potential. Therefore, local rental rates for similar commercial properties should be examined for any valuation.
Commercial Property Valuation: Getting It Right
It's worth spending the time looking at the details when establishing a commercial property valuation. There are multiple factors and you don't want to overlook something that could raise the price of your property.
At PMI Chattanooga, our experienced and friendly full-service property management team specializes in commercial real estate. We can use our expertise to help you get a professional valuation for your property in Chattanooga, TN. Discover more about our services here.
