Buying industrial property is a big commitment – one that should not be overlooked. For those new to this type of investment, it can be as overwhelming as it is exciting. But with the help of individuals in the industry, such as ourselves, you can be sure that what you’re buying is the best value for money you can get. Plus, we’ve made things even easier for you by jotting down a list of a few important things to look out for before making your decision to purchase. Take a look.
The first question you should ask yourself is whether the property you’re interested in has the appropriate zoning. Is it zoned for industrial use? This paperwork must be included in your purchase if you are looking at renting out your property’s units to manufacturers or transport companies.
Will it Work for Your Tenants?
You not only need to consider if the property will work for you, but also need to consider if it will work for your future tenants and their employees. You need to ask yourself questions such as:
• Is it close enough to ensure that workers don’t spend a fortune on their daily commute and are there taxi ranks nearby?
• Are the roads wide enough for trucks to navigate?
• Is there enough space for parking and loading?
• Are the entrances high enough for the most common trucks that will be going in and out of the unit?
• Are your units equipped with 3 phase power to run heavy equipment and machinery?
• Will your tenants need loading racks or washbays?
• Is there appropriate ventilation for companies that may be working with hazardous chemicals?
As you can see from the above questions, you will need to be flexible to your potential tenants’ needs in order to attract them.
Is There a Lot That Needs to Be Repaired or Replaced?
You never want to put in more money than a property is worth. It’s wise to carefully assess your property to see what you’ll need to sink your money into. For example, it’s a good idea to avoid properties with asbestos roofs, as these are very costly to replace and the process of replacement takes time, as it can only be carried out by trained professionals. You want a property that you can start renting out as soon as possible to ensure you’re making return on investment asap.
What Is the Infrastructure Like?
It may be a good idea to take a look at the property plans before purchase, as there may be some underground infrastructure issues you may easily overlook. Here are some things to consider:
Stormwater Attenuation Tanks: are there enough stormwater attenuation tanks to collect and disburse excess water in the event of heavy rains (which could damage your tenants’ valuable possessions, and cause them to look elsewhere for rental opportunities)?
Underground fuel: Are there underground fuel tanks which could pose a risk to future tenants who may work with hazardous chemicals?
Sand Oil & Grease Traps: Does your property have these already? Do more need to be installed? How often do these tanks need to be emptied? These are important infrastructure questions to ask when buying industrial property.
How is the Electricity Billed?
It’s important to ask about how your electricity is billed. Whether you pay municipal rates or Eskom direct rates will make a big difference, as the two are billed in very different ways, and will have a big impact on your finances.
We hope you’ve found these pointers helpful and that you feel more prepared when buying industrial property. If you have any further questions relating to what you should look out for, please don’t hesitate to contact our property specialists.