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Purchasing commercial land is an important decision. To ensure that you find and can finance the right plot for your needs, careful planning is essential. Do you need support in finding the right plot or arranging financing? Get in contact here with us.
A careful needs analysis and choice of location are crucial for the success of your business. The right location can increase operational efficiency by up to 5%.
Due Diligence minimises risks. The examination of the development plan, accessibility, and soil condition protects against unexpected costs and issues.
A solid financial plan and reviewing different loan options are essential. A specialized loan comparison can significantly reduce financing costs.
Purchasing a commercial property is a significant decision for any business. It involves not just acquiring land but making a long-term investment that can substantially impact future development. This guide offers a comprehensive overview of the entire process, from the initial needs analysis to successful completion of the purchase. We show you how to avoid pitfalls and make the right decision for your business. The right location choice is crucial for the success of your business, and we support you in finding the ideal plot.
Overview of the Process and Importance
Buying a commercial property is a complex process that requires careful planning and preparation. It starts with a detailed needs analysis, where you define your specific requirements for the property. This is followed by the search for the property, where you can use various online and offline resources. Due diligence, the careful examination of all relevant documents and circumstances, is a crucial step to minimize risks. Finally, there is the financing and the actual purchasing process. Comprehensive planning is the key to success.
Why Buy a Commercial Property?
Purchasing a commercial property offers numerous advantages. Firstly, it is a long-term investment that can appreciate over time. Secondly, it allows you high flexibility in design, as you can develop and design the property according to your individual needs. Thirdly, it has significant potential for value increase, especially if the property's location develops positively. These advantages make buying a commercial property an attractive option for businesses planning for the long term.
The Key Steps in Buying a Property
The key steps in purchasing a commercial property include needs analysis and budget planning, site search and selection, due diligence and legal review, as well as financing and completion of the purchase. A careful needs analysis helps you define your requirements for the property. Due diligence minimizes risks, and solid financing secures the purchase. Each of these steps is crucial for a successful property purchase.
The search for the ideal commercial plot can be challenging, but with the right strategies and resources, you can significantly increase your chances of success. It is important to optimally utilise both online and offline resources and consider alternative acquisition models. An active and versatile search often leads to quicker results. The active search for plots and working with multiple estate agents increases the likelihood of finding a suitable site.
Making the most of online and offline resources
Online portals and databases offer a convenient way to browse a large number of plots. Offline networks and local authorities can provide access to exclusive information and offers. A combination of both approaches is often the most effective. Directly contacting the local community for insights into upcoming construction projects and using lists of interested parties are strategic steps.
Online portals and databases
There are numerous online portals and databases that can assist you in your search for plots. These include Immobilienscout24, Dr. Klein, and Baufi24. These portals offer a wide range of search filters and features, allowing you to refine your search and find suitable sites. Using search filters and regularly checking offers is recommended.
Offline networks and local authorities
Aside from online resources, you should also utilise offline networks and local authorities. Contacts with estate agents and developers can provide access to exclusive offers. The property department, building department, and town planning office can offer valuable information about planned construction projects and available plots. Local newspapers and official bulletins often contain interesting offers. Personal connections with local stakeholders can be crucial.
Alternative acquisition models
In addition to the traditional purchase, there are also alternative acquisition models that might suit you. These include building cooperatives and leasehold. These models offer different advantages and disadvantages, which you should carefully consider. The choice of the right model depends on your individual needs and goals.
Building cooperatives
A building cooperative is a group of individuals who jointly acquire and develop a plot. This model allows for cost sharing and consideration of individual preferences in development. However, it also requires good cooperation and coordination among members. The compatibility with future neighbours is an important factor.
Leasehold
Leasehold is an arrangement where you do not buy a plot but lease it for a specified period. This reduces initial costs, as you do not have to pay the price of the land. However, regular ground rent payments are due during the lease term, and at the end of the lease, the land reverts to the owner. The leasehold offers a way to avoid initial costs but involves ongoing ground rent payments and potential loss of the plot at the end of the lease period.
Due Diligence is a crucial step when purchasing commercial property. It involves a thorough examination of all relevant documents and circumstances to minimize risks and identify opportunities. This includes reviewing the development plan, infrastructure, and soil conditions, as well as inspecting the land register and building encumbrance register. A comprehensive review protects against unexpected costs and problems.
Review of Development Plan, Infrastructure, and Soil Conditions
The development plan, infrastructure, and soil conditions are important factors that affect the value and buildability of a plot of land. A careful examination of these aspects is essential to avoid any surprises later on. Early clarity on these factors is crucial.
The Development Plan (B-Plan)
The development plan (B-Plan) governs how a plot of land can be developed. It contains detailed information about building types, building heights, building lines, site boundaries, and traffic areas. It is important to carefully review the development plan to ensure your construction plans comply with the regulations. The precise information on distances and the proportion of buildable areas (site coverage ratio, SCR) can be found in the development plan.
Infrastructure Costs and Condition
The infrastructure costs and condition of a plot of land can have significant impacts on your budget. Undeveloped plots (raw land, land designated for future development) are often cheaper, but the costs for connections to sewage, water, energy, and telecommunications must also be considered. Prioritizing the infrastructure condition is important - undeveloped land requires additional costs for utility connections.
Soil Report and Contamination Check
A soil report provides information about the soil structure, groundwater level, usage history, and contamination of a plot of land. It is important to conduct a soil report to ensure the soil is suitable for your building plans and that there is no contamination. The necessity of a soil report for assessing soil structure, groundwater level, usage history, and contamination should not be underestimated.
Land Register and Building Encumbrance Register
The land register and the building encumbrance register contain important information about the legal status of a property. They provide details on pre-emptive rights, financial burdens (land charges), and easements (building restrictions, rights of way). It is advisable to carefully review these documents before purchasing. The examination of the land register extract provides information on pre-emptive rights, financial burdens (land charges), and easements (building restrictions, rights of way).
Financing is a central aspect in the purchase of commercial property. Careful budget planning and examining various loan options are essential to secure financing. You should also consider special cases like forced auctions. A solid financial plan is the foundation for a successful purchase.
Financial Check and Equity Calculation
A detailed financial check and precise calculation of equity are the basis for realistic budget planning. Take into account all income and expenses, as well as available liquid assets and private loans. The accurate calculation of equity, including liquid assets and private loans, is crucial.
Consideration of Additional Costs
In addition to the purchase price, you should also consider the additional costs incurred when buying a commercial property. These include the land transfer tax (3.5-6.5%), land registry costs, and notary costs (approx. 1.5%). These costs can quickly add up to a considerable amount. The consideration of additional costs such as property tax, land transfer tax (3.5 to 6.5 percent), notary costs (around 1.5 percent), and broker's commission is important.
Financing Strategies
There are various financing strategies you can use when purchasing a commercial property. These include the annuity loan, the variable loan, and the interim financing. Each of these strategies has its advantages and disadvantages, which you should carefully consider. The annuity loans offer fixed interest rates and monthly installments but leave a residual debt at the end of the fixed-interest period.
Annuity Loan vs. Variable Loan
The annuity loan offers you fixed interest rates and monthly installments, but leaves a residual debt at the end of the fixed-interest period. The variable loan offers flexibility with fluctuating interest rates and a three-month notice period. The variable loans offer flexibility with fluctuating interest rates and a three-month notice period (§ 489 paragraph 2 BGB).
Specialized Credit Comparison
A specialized credit comparison over 500+ banks can help you secure the best conditions for your financing. Use this opportunity to find the best deals and minimize your financing costs. A specialized credit comparison over 500+ banks helps to secure optimal conditions.
Interim Financing
Interim financing can be useful if you need short-term capital, for example, to acquire a property before you have completed your long-term financing. However, be aware of the higher interest rates and short term of this type of financing. The variable loans are well-suited for interim financing.
Special Case: Forced Auction
Acquiring a property through a forced auction can be a cost-effective alternative but also carries risks. Thoroughly inform yourself about the procedure and conditions of the auction before placing a bid. The forced auction can offer cost savings but requires careful due diligence and knowledge of the legal process.
Information from Local Courts and Newspapers
Information about upcoming forced auctions can be obtained from the local court and newspapers. Use these sources to learn about interesting offers and make the necessary preparations. Information about upcoming forced auctions can be obtained from the local court and newspapers.
The purchase contract is a central document when acquiring a commercial plot. It is important to carefully review the contract and consider all legal aspects and pitfalls to avoid future problems. Special caution is needed with developer contracts. A thorough review of the purchase contract is essential.
Notarial Certification and Contract Review
The purchase contract must be notarised. Before notarisation, you should carefully review the notary draft and ensure that all key points such as purchase price, type of property, location, size, and any liabilities are correctly recorded. The Notarial Certification is mandatory (§ 311b paragraph 1 BGB).
Review Notary Draft (Purchase Price, Type of Property, Location, Size, Liabilities)
Check the notary draft for accuracy and completeness. Pay particular attention to the purchase price, the type of property (developed land, raw land, land awaiting development), the location, the size, and any potential liabilities. The review of the notary draft is advisable at least two weeks before the notary appointment.
Priority Notice
The priority notice is an important protective mechanism that ensures the property cannot be sold or encumbered elsewhere after you have signed the purchase contract. Ensure that the priority notice is entered in the land register. Understanding the importance of the priority notice in the land register is crucial.
Developer Contracts: Caution with Reservation Confirmations
Special caution is required with developer contracts. Carefully examine the reservation confirmations and ensure that you are not obligated to build with the developer, even if the property is unsuitable for your purposes. The examination of the developer's ownership status is crucial.
Verify Developer's Ownership Status
Ensure that the developer is indeed the owner of the property before signing a contract. Request a current extract from the land register and carefully check the ownership status. The verification of the developer's actual ownership of the property is critical.
Document Oral Agreements
Oral agreements are not legally binding. Make sure all agreements are recorded in writing in the purchase contract to avoid misunderstandings and disputes. The documentation of all oral agreements to ensure their validity is important.
The different types of land vary in terms of their level of development and buildability. It is important to know the differences to make the right choice for your business. You should also consider areas for forestry and agricultural use, even if they are not buildable. Understanding the types of land is crucial for making the right decision.
Ready-to-build land, undeveloped land, and land for future development
Ready-to-build land is developed and immediately buildable. Undeveloped land is not developed and requires additional investment for development. Land for future development is not yet buildable, but it is expected to become building land in the future. The difference between ready-to-build land (developed, building rights), undeveloped land (not developed), and land for future development (expected to be building land) is important.
Development level and buildability
The development level and buildability of a plot are crucial factors for its usability and value. Ready-to-build land offers the highest security and flexibility, while undeveloped land and land for future development are associated with higher risks and uncertainties. The development level affects immediate usability.
Areas for forestry and agricultural use
Areas for forestry and agricultural use are generally not buildable, but they can still be of interest for certain businesses, for example, those relying on agricultural products or seeking a natural environment. The areas for forestry and agricultural use are generally not buildable.
Not buildable
It is important to note that areas for forestry and agricultural use are generally not buildable. Construction is only possible in exceptional cases and under strict conditions. Building is only possible in exceptional cases and under strict conditions.
Standard land value (BORIS) as a guide
The standard land value (BORIS) is a guideline for the value of a plot of land, determined by the appraisal committees of the municipalities. It can serve as a reference point for price negotiation but is not binding. The standard land value (BORIS) serves as a reference point.
The price of land is often negotiable. A thorough market value analysis and understanding arguments for a price reduction can help you lower the price and secure a good deal. The standard land value serves as a reference point. A skilful negotiation can lead to significant savings.
Arguments for a Price Reduction
There are various arguments you can use for a price reduction. These include existing contamination, easements, or an unfavourable location of the property. Also, a lack of or inadequate development can be a reason for a price reduction. Arguments for a price reduction are existing contamination, easements, or an unfavourable location.
Comparative Method for Determining Market Value
The comparative method is a way to determine the market value of a property by comparing the prices of similar properties in the area. This method can help you ascertain the fair price for the property. The comparative method should be applied to determine the market value.
The Standard Land Value as a Reference Point
The standard land value is a reference for the value of a property, determined by the valuation committees of the municipalities. It can serve as a reference point for price negotiation, but it is not binding. The standard land value serves as a reference point.
A checklist can help you keep track of all the important steps and aspects when purchasing a commercial plot and ensure that you don't forget anything. The checklist should include items before the search, during the search, and before the purchase contract. A comprehensive checklist ensures success.
Before the search: Defining your preferences
Before starting your search, you should define your preferences regarding the size, shape, orientation, sunlight exposure, view, infrastructure, and cost of the plot. This helps you focus your search and find suitable plots more quickly. The definition of plot preferences (size, shape, orientation, sunlight exposure, view, infrastructure, cost) before the search is important.
During the search: Reviewing documentation
During the search, you should carefully review documents such as the development plan, land register, and contaminated site register. This helps you identify risks and assess the suitability of the plot for your purposes. The review of plot information (development plan, land register, contaminated site register) is important during the search.
Before the purchase contract: Financial security
Before the purchase contract, you should secure your financial situation and consider a construction cost buffer as well as additional purchase costs. This helps you cover unforeseen expenses and ensure the financing of the plot. Considering a construction cost buffer and additional purchase costs is important before the purchase contract.
Purchasing a commercial property is a complex but rewarding investment. With the right preparation, careful planning, and professional support, you can avoid pitfalls and secure the ideal site for your business. A strategic approach is the key to success.
Summary of Key Points
The key aspects of purchasing a commercial property are needs analysis, site search, due diligence, financing, and the purchase contract. Each of these requires careful attention and preparation. Needs analysis, site search, due diligence, financing, and the purchase contract are the main points to focus on.
Outlook on Future Market Developments
The property market is constantly changing. It is important to stay informed about current trends and developments to make the right decisions. Staying informed about current trends and developments is essential.
The Importance of Professional Advice
Professional advice from experts such as estate agents, lawyers, and financial advisors can help you avoid pitfalls and make the best decisions. Use this support to successfully complete your property purchase. The importance of professional advice should not be underestimated.
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On Immobilienscout24 you will find a wide selection of plots and helpful search filters to find the right commercial plot.
Dr. Klein offers information and services related to the financing of building plots, including foreclosure auctions and leasehold rights.
Baufi24 provides information on financing when purchasing land, from equity calculation to credit comparison with over 500 banks.
Grossmann & Berger offers a comprehensive guide to purchasing land, covering all important aspects from reviewing the development plan to price negotiations.
What factors influence the value of a commercial property?
The value of a commercial property is significantly influenced by its location, size, development plan, utilities, and soil condition. Contaminants can also reduce the value.
How can I find the right commercial property for my business?
Start with a detailed needs analysis. Define your requirements regarding location, size, and infrastructure. Use online portals, contact real estate agents, and talk to the local council.
What risks are associated with buying a commercial property?
Risks include unexpected utility costs, existing contaminants, legal restrictions due to the development plan, and market changes that may affect the property's value. Therefore, thorough due diligence is essential.
What should be considered when financing a commercial property?
Plan your budget carefully, considering not only the purchase price but also the additional costs (property transfer tax, notary costs, land registry fees). Compare various financing options and seek professional advice.
What role does the development plan play in purchasing a commercial property?
The development plan governs the manner and method of development allowed on a plot. It includes detailed information about building methods, building heights, building lines, and building limits. Ensure that your building plans comply with these requirements.
What does utilities mean and what costs are associated with it?
Utilities include connections to wastewater, water, energy, and telecommunications. Undeveloped plots (raw land, land awaiting development) are often cheaper, but the costs of utility connections must also be considered.
What is a soil investigation report and why is it important?
A soil investigation report provides information on the soil makeup, groundwater level, history of use, and pollutant load of a property. It is important to ensure that the soil is suitable for your building plans and free of contaminants.
What should be considered during price negotiations?
Inform yourself about the market value of comparable plots. Arguments for a price reduction can include existing contaminants, easements, or an unfavourable location. The soil reference value (BORIS) serves as a point of reference.
