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Commercial property acquisition
The acquisition of a commercial property is a significant investment. It is therefore all the more important to be well prepared and to avoid common pitfalls. This article provides you with a comprehensive overview of all the relevant aspects, from the initial assessment to successful completion. Do you need individual advice? Get in touch with us here.
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The correct selection of a commercial property is crucial to avoid costly mistakes. Pay attention to the intended use, buildability, and valuation.
A professional valuation is essential to accurately determine the market value. Consider all relevant factors such as location, developability, and contaminated sites.
A thorough due diligence minimises risks. Check the land register extract, development plan, and soil report to avoid unexpected surprises and increase returns by up to 1%.
Definition and Distinction: What is a Commercial Property?
A commercial property is significantly different from a residential property. The main difference lies in its purpose of use: while residential properties are primarily for living, commercial properties are intended for commercial or industrial activities. This also affects the buildability, as commercial properties often face specific regulations and restrictions tailored to the type of business. The valuation also differs, as factors such as potential returns and suitability for certain business models play a more significant role in commercial properties. Choosing correctly is crucial to avoid costly mistakes when acquiring commercial property.
Types of Commercial Properties
There are various types of commercial properties that differ in their development status and usability. Building land is ready for development and intended for the construction of commercial buildings. Land earmarked for development is not yet designated as building land, but it is expected to become building land in the future. Here, a direct inquiry with the local authority is advisable, as recommended on bodenrichtwerte-deutschland.de. Development land is intended for construction but still requires development measures. Brownfield land is undeveloped or derelict land that can potentially be developed for commercial use. Choosing the right type of land heavily depends on your specific needs and plans.
Importance of Location and Infrastructure
The location of a commercial property is a crucial factor for the success of your business. The macrolocation refers to the regional environment, while the microlocation concerns the immediate neighbourhood. Good access to transport routes and public transport is essential to ensure accessibility for customers and employees. The existing infrastructure (electricity, water, sewage) also plays an important role. Inadequate infrastructure can lead to significant additional costs. Make sure that all necessary connections are present and adequately sized. The importance of location is also highlighted on immoverkauf24.de.
The Standard Land Value as a Starting Point
The standard land value serves as an initial guideline for pricing a commercial property. It is determined by expert committees of the respective municipalities and indicates the average value per square metre for a specific location. However, it is important to note that the standard land value is only a point of reference. Actual market values can differ significantly, as Bodenrichtwerte Deutschland emphasises. Deviations of up to 20% are not uncommon, as individual characteristics of the property and the current market conditions play a major role.
Professional Valuation: Appraisers and Methods
For an accurate valuation, hiring a qualified appraiser is essential. An appraiser considers all relevant factors and prepares a legally binding valuation report in accordance with § 194 BauGB. This report is not only important for pricing, but also for legal and tax purposes. There are various valuation methods that are applied depending on the type of property. The comparison method is often used for undeveloped land, while the cost method and the income method are employed for developed properties. Choosing the right method is crucial for a realistic valuation. The significance of a qualified appraiser is also highlighted on Heid Immobilienbewertung.
Factors Influencing Property Value
Apart from the location, there are numerous other factors that influence the value of a commercial property. Buildability is a decisive factor: What type of buildings can be erected? What restrictions exist? The layout and size of the property also play a role. An unfavourable layout or impractical size can limit usability. The degree of development is also important: Are all necessary connections (electricity, water, sewage) present? Contaminations and soil condition can significantly reduce the value due to potential remediation costs. Also, encumbrances such as rights of way or easements can affect the value. Usability is determined by the land use and development plan.
Land Register Extract and Building Restrictions Register
Before acquiring a commercial property, a thorough examination of the legal framework is essential. The land register extract provides information on the ownership status and any encumbrances on the property (e.g. land charges, mortgages). The building restrictions register contains details of public-law obligations affecting the property (e.g. setback areas, building prohibitions). A careful review of these documents is crucial to avoid unexpected surprises. The priority notice secures the buyer's claim to a transfer of ownership.
Development Plan and Preliminary Building Enquiry
The development plan governs the buildability and usage options of a property. It includes detailed provisions on the type and degree of development, buildable areas, and construction methods. If no development plan is available, a preliminary building enquiry can be submitted to the relevant building authority. The preliminary building enquiry provides information on whether a planned construction project is fundamentally approvable. A strategic use of a preliminary building enquiry can significantly enhance a property's appeal, as Immoportal highlights.
Contaminated Sites and Soil Report
Contaminated sites and soil pollution pose a significant risk. They can lead to high remediation costs and restrict the property's usability. A soil report provides information on the soil condition and the presence of pollutants. If there is suspicion of contamination, such a report is essential. The remediation obligations generally lie with the property owner. It is advisable to be informed about potential contaminated sites before purchase and to include remediation costs in the purchase price calculation.
Financing Models for Commercial Property
The financing of a commercial plot requires careful planning and the selection of the appropriate financing model. The traditional bank financing remains a common option. Typically, a loan is taken out, secured by a land charge on the property. An alternative is leasing, where the property is not purchased but rented. This can be particularly attractive for businesses looking to save capital. There are also various funding programmes from the federal and state governments that support the acquisition of commercial property.
Ancillary Costs in Property Acquisition
When acquiring a commercial property, significant ancillary costs arise in addition to the purchase price. The property transfer tax is a tax levied on the purchase price. The rate of property transfer tax varies by federal state. Added to this are the notary fees, which amount to about 1.5% of the purchase price, as well as the land registry fees for the registration of the change of ownership. These ancillary costs should definitely be considered in your financial planning.
Running Costs After Acquisition
Even after acquiring a commercial property, there are ongoing costs. The property tax is an annual tax levied on the value of the property. The amount of property tax is determined by the municipality. Additionally, development contributions can become due if the property is connected to the public road network or to the sewage system. These contributions can be considerable, depending on the municipality and the level of development.
Target Audience Definition: Who is the Ideal Buyer?
Successful marketing begins with defining the target audience. Who is the ideal buyer for your commercial property? Possible target audiences include property developers, project developers, investors, and private builders. Property developers and project developers typically search for large plots for the construction of residential or commercial buildings. Investors are interested in properties with high return potential. Private builders tend to look for smaller plots for the construction of a family home or a small commercial enterprise. The approach to each target audience should be tailored to their specific needs and interests.
Creating an Effective Brochure
The brochure is the most important marketing tool when selling a plot. It should contain all relevant information about the property, such as location, size, developability, and price. Professional photos are essential to present the property optimally. The descriptions should be detailed and precise. It is important to highlight the location advantages and development potential of the property. An effective brochure captures the interest of potential buyers and increases the chances of a successful sale.
Sales Strategies: Private Sale vs. Estate Agent
When selling a commercial property, you have the option of a private sale or hiring an estate agent. A private sale saves the estate agent's commission but requires more time and expertise. An estate agent has a network of potential buyers and can professionally manage the sales process. The advantages and disadvantages of both options should be carefully weighed. If you choose an estate agent, it is important to negotiate the estate agent's commission.
Speculation Tax: Deadlines and Exceptions
When selling a commercial property, tax considerations can play a significant role. The speculation tax is incurred if a property is resold within a certain period (usually ten years) after purchase. The amount of the speculation tax depends on the seller's personal tax rate. By adhering to the 10-year rule, the speculation tax can be avoided. However, there are also exceptions, for instance, in cases of personal use of the property.
Trade Tax: When Is the Sale Considered Commercial?
Under certain circumstances, the sale of a commercial property can be classified as commercial. This is particularly the case if several properties are sold within a short timeframe (three-object rule). In this situation, trade tax applies. The impact on the tax burden can be substantial. It is advisable to become informed about the tax implications before selling and to seek tax advice if necessary.
Real Estate Transfer Tax for the Buyer
The real estate transfer tax is a levy payable by the buyer when acquiring a property. The rate of the real estate transfer tax varies by federal state and ranges from 3.5% to 6.5% of the purchase price. However, there are also exemptions and special regulations, for example, in cases of inheritance or gifting. The real estate transfer tax is an essential factor in the purchase price calculation.
Preparation for Sale
A successful sales process begins with careful preparation. First, all relevant documents should be gathered, such as the land register extract, the development plan, and any potential appraisals. It is also advisable to obtain a financing confirmation from the buyer to ensure that they can actually pay the purchase price. Good preparation saves time and stress.
The Purchase Contract at the Notary
The purchase contract is notarised by a notary. The notary ensures that all legal aspects are taken into account and that the contract meets the interests of both parties. The purchase contract contains all essential agreements between the buyer and the seller, such as the purchase price, the handover date, and the payment terms. The notary plays a central role in the sales process.
Payment Processing and Transfer of Ownership
After the notarisation of the purchase contract, payment processing takes place. The buyer transfers the purchase price to a notary escrow account. Once the purchase price has been received, the transfer of ownership occurs. First, a priority notice of conveyance is entered in the land register to secure the buyer's claim to the transfer of ownership. Subsequently, the buyer is registered as the new owner in the land register.
Dealing with Contaminated Sites and Soil Pollution
Contaminated sites and soil pollution pose a significant risk. They can lead to high remediation costs and limit the usability of the property. In the worst case scenario, there may even be an obligation to remediate
. It is important to be informed about any potential contaminated sites before purchasing and to include the costs for remediation in the purchase price calculation. Liability issues should also be clarified.
Disputes with Neighbours and Authorities
Disputes with neighbours or authorities can significantly delay or even prevent the acquisition of commercial property. It is advisable to talk to neighbours before purchasing and to be informed about any potential conflicts. The feasibility of obtaining permits for the planned construction project should also be clarified in advance with the relevant building authority. Good communication can help to avoid conflicts
. Legal advice should be sought if necessary.
Buyer's Insolvency
The insolvency of the buyer poses a significant risk for the seller. In the event of insolvency, it may be difficult to realise the purchase price. It is advisable to check the buyer's creditworthiness before selling and, if necessary, to agree on security, such as a bank guarantee. Withdrawal rights should also be agreed in the purchase contract.
The acquisition of commercial property is a complex process that requires careful planning and preparation. From accurate valuation and financing to legal protection, there are numerous aspects to consider. With the right knowledge and a strategic approach, you can avoid costly mistakes and lay the foundation for your business success. The information on immobilien-abc.de can help you gain an overview.
Auctoa supports you with cutting-edge technology and comprehensive expertise in the evaluation and selection of the optimal commercial property. Our AI-powered analyses provide precise and market-appropriate valuations, enabling you to make informed decisions.
Key Benefits of Commercial Property Acquisition
Here are some of the main advantages you will achieve:
Accurate Valuation: Avoid overpaying with precise AI-driven valuations.
Risk Minimisation: Identify potential issues early with comprehensive analyses.
Strategic Decisions: Make informed decisions based on real-time market data.
Are you ready to successfully acquire your next commercial property? Discover our solutions for commercial and development land and benefit from our expertise. Contact us today to start tailored consultations and prepare your project optimally. Register for free and receive an immediate initial assessment of your property's renovation needs. Get in touch now!
Bodenrichtwerte Deutschland provides information and guidance for property valuation.
Heid Immobilienbewertung emphasizes the importance of a qualified appraiser for an accurate property valuation.
Immoportal highlights the strategic use of a preliminary building enquiry to enhance the attractiveness of a property.
What distinguishes a commercial property from a residential property?
The main difference lies in the purpose of use: commercial properties are intended for business or industrial activities, while residential properties primarily serve as living spaces. This affects the buildability and the valuation.
What types of commercial properties are there?
There are various types such as building land (immediately ready to build on), planned development land (future building land), undeveloped land (requires development) and brownfield land (potentially developable). The choice depends on your specific needs.
How important is the location of a commercial property?
The location is crucial for success. Pay attention to good connections to transport routes and public transport as well as the existing infrastructure (electricity, water, sewage).
What role does the land value play in pricing?
The land value serves as an initial reference, but actual market values can differ significantly. A professional valuation by an expert is essential.
What factors influence the value of a commercial property?
In addition to location, the buildability, the layout, the size, the level of development, environmental liabilities, and the soil condition influence the value.
What legal aspects should be checked before purchasing?
Check the land register (ownership, charges) and the public encumbrance register (public law obligations). The local development plan regulates the buildability and the permissible uses.
What financing models are available for commercial properties?
Common options include bank financing (loan with mortgage), leasing (renting the property), and various funding programmes from the federal and state governments.
How can the tax burden be optimised when selling?
Consider the speculation tax (time limits and exceptions) and the business tax (when the sale becomes commercial). The property transfer tax is to be paid by the buyer.
