Is the Business Condo Concept Right for Your Business?

You have been in business for three to five years and your business is now doing very well. Should you consider purchasing a business condo?

In many metropolitan areas the business condo concept is gaining ground. Similar to an existing office building, industrial multi-tenant building or retail center, the individual units are owned rather than leased by separate owners. Each individual condominium owner pays a monthly fee to a condominium association, which utilizes these funds to take care of all of the common areas of the building and grounds. As an owner, you have a say in the budgeting process for these expenses.

Whether you are a doctor, lawyer, tradesman, service sector entrepreneur, or other professional, careful consideration has to be given to this growing form of real estate ownership. Here are a few benefits to business condo ownership.

1) There is no longer a need to collect rent receipts from your landlord. A business condo allows the owner to keep a consistent monthly payment not subject to annual escalations contained in a lease. Furthermore it allows an owner to better control their overhead costs.

2) You build equity and wealth through real estate ownership. In addition, there are tax advantages to owning this type of asset.

3) Not only can you pick a superb location for your business, you are in charge of the actual design and build-out of your business interior. Your space can be built to your exacting specifications. Additionally, you will not be subject to unnecessary moves due to large tenant expansions.

4) It allows you to have a solid exit strategy. With ownership you have the option of selling the business condo along with your business enterprise or hold onto the condo and lease it out. Not to mention the fact that it allows virtually seamless ownership succession for family businesses.

5) Numerous financing options are available. Typically a business owner can be expected to put down 20 to 25 percent for a commercial mortgage. With interest rates fairly low, mortgage payments could be less than what one could expect to pay in a monthly lease. Another loan program available to small business owners is the Small Business Administration (SBA) 504-loan program available through qualified lenders. Under this program an owner can put down as little as 10 percent of the cost of the condo unit.

Given the benefits to business condo ownership, a business owner, professional practitioner, service sector entrepreneur, tradesman or retailer, must give careful consideration to this form of real estate ownership. One should crunch the numbers to make sure it makes financial sense for your business. Also, in consultation with your attorney, accountant, and real estate professional examine whether it makes business sense to purchase this real estate asset.

Is the Business Condo Concept Right for Your Business?