Believe it or not, commercial property conversions are the newest property scheme around. It is increasingly becoming popular, and you can earn up to six-figure income in one commercial deal – what the majority of investors would struggle to make in four to five buy-to-let property deals!
Though it can be a challenge, making a decision as significant as buying a commercial building for conversion requires that you learn how to convert a commercial property whilst mitigating any potential risks successfully. You can implement the step-by-step procedures for finding and funding commercial buildings and turning them into goldmines. With that said, this post will take you through the conversion of a commercial building into five goldmines – office spaces, distribution centres, manufacturing, supermarket, studios.
OFFICE SPACE – DENTIST OFFICE, FITNESS CENTRE, UPSCALE HAIR SALON
Comfortable and affordable office space is becoming hard to come by in many major cities. These days, many successful companies often prefer to work from converted commercial buildings as it enables them to work with a completely blank canvas.
Converting a commercial building that has been used for many years into vibrant and stunning office spaces(dentist office, fitness centre, and upscale hair salon) can be a good source of wealth to investors.
Many city offices seldom come with parking facilities, meaning their staff members will be required to pay high parking fees for simply going to work. And this could prevent many potential recruits from applying for a position with your company. However, commercial buildings often come with some level of external parking. Businesses also don’t mind getting a converted commercial building to stake a claim to a desirable neighbourhood, which can attract young talent.
Of course, it may take a little work to turn a commercial building into a functional office space. Whether you’re knocking down walls for an open-concept communal feel or dividing up rooms into private offices, turning spaces into working space may be costly and time-consuming. But overall, it’s worth it. Overall, this could potentially give you more bang for your buck.
Commercial buildings are a large open space and can be located on the outskirts of villages and busy towns, thus avoiding heavy traffic during peak times and providing more location options. Manufacturing companies greatly need spaces like this.
Depending on the business activities, commercial building conversion for manufacturing allows businesses to fully dictate their industry fit-out, improve space for their growing workforce, presents better access and more location options, and have continued access to the local talent pool. As an investor, finding and funding this kind of conversion can be a great long-term investment. You can create a rentable space out of it and generate a consistent extra income.
While the COVID-19 pandemic has caused retail stores and offices to shut their doors, empty stores and shopping centres are increasingly being converted into distribution centres. Demand for warehouse space is so strong that warehouse inventory is expanding at an overwhelming rate. On the surface, converting commercial buildings into distribution centres seems like a great idea. Commercial buildings located at busy intersections, highway interchanges or near population centres tend to have spaces well-suited to racking and material handling systems. Backend docks, easy access for trucks and site access are other added advantage. If you can securely invest in a property like this, trust me, it won’t be in the market for long before it is occupied.
However, as it is with any building conversion, turning a commercial building into distribution centres will not happen without overcoming some challenges. You would need the approval of city officials, in some cases, neighbours etc., as some might not value the increased truck traffic.
Determining the best location for a supermarket may occasionally require the conversion of a commercial building – and specific steps may be needed to make the transformation complete. The majority of local authorities have designated shopping or commercial areas within their planning policies where shops and other commercial uses are encouraged. So it is likely to be very difficult to gain permission for commercial use outside of these areas, especially in a place that might otherwise be wholly residential. But if you can get a convertible commercial building in a suitable location, you should count it as a goldmine.
First, you will need to get a copy of the local and county regulations, codes, and building restrictions for a supermarket in the commercial building’s geographic region. Use the supermarket’s health and fire department regulations to ensure your planning covers all of the mandatory safety and health features mandated.
A spacious commercial building can be perfectly turned into a studio. You can enhance what was already available to custom-build the property for studio production, film/Movies, News Studio, etc. A reliable architect will partition the building and make it more livable by adding a large glazed roof light over the top of the space. They will bring extra daylight elsewhere by adding further roof lights or making existing ones larger. You can bring in a new entrance to replace any open porch, a new glazed link in place of an open bridge, and a roof terrace built on top of the studio. I can bet that this would be a laudable investment.
FACTORS TO KEEP IN MIND
Conversion of commercial properties is excellent but not without its challenges. When you want to move up the chain to commercial property, there are several different factors to keep in mind. It would be best to have a detailed plan in place for completing your project and avoid tripping up unnecessarily. But don’t worry! This post will take you through how you can seamlessly turn a commercial building into any mentioned five goldmines.
Before committing to the purchase of a commercial property, assess all of your funding options and the level of work involved in the conversion. It may also be worthwhile to seek advice from a certified property accountant specialising in the property market and how that side of things works. Estimating your conversion cost can be tricky as there is a lot to consider. Therefore, it is essential you completely understand what your project needs are and that you comply with the necessary regulations. Many issues that arise in converting a commercial building usually come from not considering unexpected problems, such as discovering a problem with the structure.
Remember whom you’re going to market your conversion to. Are you planning to create a supermarket, studio, or distribution centre, are the local town centre and other amenities easily accessible? Where is the nearest bus stop? Can the occupants or your staff be able to park outside? Ensure you understand which external areas come with the property. You don’t want a parking dispute with your new neighbours. People often want convenience, so the distance to the nearest major roads will always be another major factor in decision making. Consider the immediate area around the property too.
The site of the commercial building is also worth remembering. For instance, if it is situated in or close to a residential area, you may not get approval to convert it for manufacturing due to noise and pollution, which can severely affect your project’s value and who is likely to buy it. There may also be limitations on extensions and other external work. However, your local authority can advise you on what you need to do to remain compliant.
Planning permission on the property
You may need to change the use of a commercial building to suit the business activity. If so, you will need to obtain planning permission for the business type. The business type is categorised as follows:
- Class A includes shops, restaurants, retail warehouses, estate agents, hairdressers, cafes, snack bars, Pubs etc.
- Class B includes Offices, Storage and distribution, light industrial, general industrial (like manufacturing, mechanical) etc.
- Class C includes Hotels, residential, Care Facilities, nursing homes, colleges, hospitals, an employer with domestic staff, etc.
- Class D includes non-residential Institutions like clinics, crèches, music and concert halls, art galleries, health centres, schools, libraries, theatres, museums, places of worship, etc.
UNDERSTAND YOUR MARKET
Having a solid insight into the current market trends is essential to ensure your project yields the desired return. Having at least three different exit plans is very important before you start the project. Will you sell the property once it’s wholly converted, or will you hold it as a rental property for ongoing monthly income and longer-term capital growth? In both cases, pitching the right price is just as vital as the conversion itself.
Understanding your market will also allow you to approach lenders for funding. But if you cannot show how you will repay the loan, lenders will walk away. They wanted to know “how much”, “how long”, and “when the total money will be paid plus interest” They also want to see that the project is a viable one and that you have covered all the basics. Do your research and put a plan in place well before you buy a property to convert.
If you’re looking to make big money by turning the less valuable commercial property into more valuable properties, this is the best way to make it happen. You can do it even if you are starting with no finances or experience. Send All Request & Donations To: 2288 Gunbarrel Rd. Suite 154/388, Chattanooga/TN 37421. Our Cash App: $LoyalDetermined