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Buying Land: What You Should Consider About the Location
Choosing the right location is crucial for the success of your business. But what really matters when it comes to location? This article highlights the key aspects, from soil conditions to competitor analysis. Do you need support in selecting a location? Get in touch with our experts here.
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The choice of location is crucial for the success of your business. A careful analysis of the macro and micro location minimizes risks and maximizes opportunities.
Check the development plan, the soil condition, and potential contaminations to avoid unexpected costs. The early involvement of experts helps identify potential issues and control renovation costs.
Consider the transport connections, parking facilities, and the future security of the property. A good location can increase customer frequency by 20% and boost rental income by 10%.
Einleitung: Die Bedeutung der Lage beim Kauf von Gewerbegrundstücken
Are you looking to buy a plot? Choosing the right location for a commercial property is a fundamental decision that significantly influences the long-term success of your business. It's about much more than just the price per square metre. The location affects customer footfall, employee satisfaction, and logistical capabilities. Choosing the wrong location can lead to substantial financial losses. Therefore, a careful analysis and consideration of all relevant factors are essential.
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This article serves as a comprehensive guide to help you understand the key aspects of location selection and make informed decisions. We show you what to look for in a location analysis, which cost factors are relevant, and how to minimise risks. With this knowledge, you are well-equipped to find the ideal location for your business. The expertise of a real estate agent can be crucial in avoiding costly mistakes, as this guide shows.
Micro vs. Macro Location: A Detailed Perspective
The analysis of location must occur on two levels: the macro and the micro. The macro location considers the region, city, or district. Factors such as economic development, population structure, and transport connections are significant here. The micro location refers to the immediate surroundings of the property. Aspects such as visibility, proximity to customers, and the competitive situation are crucial. A detailed site analysis helps you to identify the advantages and disadvantages of each location and to make the best decision for your business.
Infrastructure: More Than Just Roads
Good infrastructure is essential for smooth business operations. This includes not only transport connections with motorways, public transport, and airports but also digital infrastructure with fast internet and mobile network coverage. The supply of electricity, water, and sewage must also be ensured. Inadequate infrastructure can lead to significant disruptions and additional costs. Therefore, ensure a comprehensive examination of the infrastructure before purchasing commercial property. You can also find information about the importance of infrastructure in our article on factors for property valuation.
Competition Analysis: Opportunities and Risks
The analysis of the competitive situation is essential for assessing market potential. Ask yourself: Is there a high concentration of competitors nearby? How are market shares distributed? What are the strengths and weaknesses of the competitors? A well-founded competition analysis helps you to determine your position in the market and adjust your competitive strategy accordingly. Also, consider the provider advantages within commercial objects to identify potential market entry barriers.
What the Development Plan Governs
The development plan specifies what kind of development is permitted on a plot of land. It regulates the type of use (commercial area, mixed area, residential area), the building density (site area ratio, floor area ratio), and the building method (open or closed construction). Violating the development plan can lead to significant consequences, including the demolition of the building. Therefore, before purchasing a commercial property, thoroughly acquaint yourself with the development plan and, if necessary, seek advice from a lawyer.
Early Consultation with the Municipality
Contact the municipality early to check the viability of your project. An outline planning application gives you legal certainty at an early stage. Resolve any outstanding issues with the building authority. Getting the municipality involved early can save you a lot of time and money. The compliance with the development plan and the Building Code is crucial to understand the development potential and restrictions.
Risk Minimisation through Development Plan Review
Reviewing the development plan is a crucial step in minimising risks when purchasing a commercial property. Ensure your planned construction project complies with the provisions of the development plan. If there are any uncertainties, consult an expert. A careful review of the development plan protects you from unpleasant surprises and unnecessary costs. The expertise of an estate agent is essential in this regard.
The Importance of the Contaminated Site Inspection
Checking for contaminated sites is essential to avoid unpleasant surprises. Enquire about the previous use of the property. Have soil samples taken and analysed. Obtain information from the municipality's contaminated land register. Contaminated sites can lead to significant remediation costs and restrict the use of the property. The investigation of previous use is crucial to identify potential pollutants or munitions for which the new owner is responsible for removing.
Soil Condition: Load-bearing Capacity and Ground Investigation Report
The condition of the soil significantly impacts construction costs. Is the ground stable enough for your building project? A ground investigation report provides insight into the soil conditions. Poor ground can necessitate complex and costly foundation measures. The soil condition is a key factor in property analysis, including the assessment of contaminated sites.
Comprehensive Risk Assessment Before Purchase
A comprehensive risk assessment is crucial before purchasing a commercial property. This involves not only checking for contaminated sites and analysing soil conditions but also considering other potential risks such as flood risk or slope. A thorough risk assessment helps you realistically estimate the total project costs and avoid unexpected expenses. The calculation of property costs should take all potential risks into account.
The Importance of Good Transport Connections
A good transport connection is crucial for your business's accessibility. Is there a good link to public transport? Is the site well connected to the motorway network? Are the access routes adequately sized? Poor transport links can lead to loss of revenue and employee dissatisfaction.
Parking Facilities: A Must for Customers and Employees
Adequate parking spaces are a vital factor for customer satisfaction and employee contentment. Are there enough parking spaces for customers and employees? Are the parking spaces chargeable? Are there disabled parking spaces available? An insufficient number of parking spaces can deter customers and diminish the location's appeal. Therefore, a thorough parking analysis that considers peak times and potential expansion needs is essential.
Infrastructure as a Competitive Advantage
Optimal transport connections and sufficient parking facilities are not just a comfort factor but a crucial competitive advantage. Businesses with good accessibility are more attractive to customers and employees and can thus stand out from the competition. Therefore, invest in good infrastructure to secure your long-term success. The checklist for commercial properties should include a detailed assessment of communication facilities and access and parking capacities.
The Purchase Price: Room for Negotiation and Market Value
The purchase price is just one part of the total costs. Have the market value of the plot determined by an independent appraiser. Use your negotiation room. An excessively high purchase price can diminish your return. The early involvement of experts helps to identify potential problems and control renovation costs.
Additional Costs: Land Transfer Tax, Notary, Estate Agent
Plan the additional costs carefully. The land transfer tax varies depending on the federal state. The notary costs are legally fixed. The estate agent’s commission is negotiable. Additional costs can quickly account for a substantial part of the total costs. Budgeting should not just include the purchase price, but also additional costs such as notary fees, land registry entry, and land transfer tax.
Development Costs: An Often Underestimated Factor
The development costs can be significant. These include the connection to the public network (electricity, water, sewage) and road construction (construction of access roads). Development costs are often an underestimated factor that can significantly affect the overall costs of the project. A detailed cost analysis is therefore essential. The calculation of development costs should be carried out early to avoid financial surprises.
Flexibility and Suitability for Third-Party Use
Consider the flexibility and suitability for third-party use of the property. Can the property be adapted to changing needs? Is the property of interest to other industries as well? A flexible and suitable property offers you long-term security. The assessment of a property's suitability for future leasing, taking into account potential demand in the region, is crucial.
Regional Development: Growth Potential and Future Prospects
Get informed about regional development. How is economic growth in the region? How is the population developing? Are there support programs for businesses in the region? Positive regional development offers you good future prospects. The consideration of long-term strategic alignments is crucial, as purchasing commercial land is a long-term strategic decision.
Ensuring Long-term Perspectives Secures Investment
The future security of a commercial property depends on various factors. Besides flexibility and suitability for third-party use, regional development and long-term perspectives also play an important role. A careful analysis of these factors helps you make an informed decision and secure your investment in the long term. The information on property purchase should also consider future developments.
The Importance of Careful Planning
Careful planning is the key to success. Create a checklist with all the important criteria. Seek expert advice from brokers, appraisers, and lawyers. Careful planning minimizes risks and maximizes your chances of success. Positioning as a specialist with a broad network provides access to off-market properties and support in contract negotiations.
Location as a Competitive Advantage
The right location can give you a crucial competitive advantage. A good location attracts customers. An attractive location makes it easier to recruit employees. Location is a crucial factor for the success of your business. Location-specific due diligence is essential to avoid costly mistakes in assessing location factors.
Checklist for Land Purchase
To ensure that you don't forget anything when buying land, we've put together a checklist for you:
Site Analysis: Macro and micro location
Infrastructure: Transport links, digital infrastructure, supply
Competitive Analysis: Competition situation, market share
Development Plan: Type of use, building density, construction method
Contamination Check: Previous use, soil samples, contamination register
Soil Condition: Load-bearing capacity, soil survey
Transport Links: Public transport, motorway connections, access routes
Parking Facilities: Number of parking spaces, parking fees, disabled parking spaces
Cost Factors: Purchase price, additional costs, development costs
Future Security: Flexibility, third-party usability, regional development
Choosing the right location for your business is a strategic decision that significantly influences the long-term success of your company. A thorough analysis of the location, infrastructure, competitive situation, and legal framework is essential to minimise risks and capitalise on opportunities. With this guide, you are well-equipped to find the ideal location for your business.
Auctoa supports you in making the optimal decision. Our expertise in property valuation and analysis helps you recognise the potentials and risks of different locations and make the best choice for your company. We offer comprehensive advice and support in location selection, cost analysis, and risk assessment. Rely on our experience and secure the ideal location for your business.
Would you like to learn more about our services and how we can support you in choosing a location? Contact us today for a non-binding consultation. Together we will find the perfect location for your company and lay the foundation for your success. Register for free and receive an immediate initial assessment of your property's renovation needs.
ifo Dresden offers an analysis of the determinants of companies' international location choices.
Statistisches Bundesamt provides information on the regional economic structure.
Germany Trade & Invest (GTAI) informs about investment opportunities in Germany.
Wikipedia offers an introductory article on location theory.
Why is the choice of location so crucial when purchasing a commercial property?
The choice of location significantly influences customer frequency, employee satisfaction, and logistical possibilities. A poor location choice can lead to substantial financial losses.
What is the difference between macro and micro location?
The macro location considers the region, city, or district, while the micro location refers to the immediate surroundings of the property. Both levels are important for a comprehensive location analysis.
What role does the development plan play in buying a commercial property?
The development plan determines what type of construction is permissible on a property. A violation can lead to significant consequences. Compliance with the development plan and the Building Code is crucial to understand the development potential and restrictions.
Why is it so important to conduct a contamination check?
Contaminations can lead to significant remediation costs and restrict the use of the property. The examination of previous usage is essential to discover potential pollutants or munitions.
What cost factors should I consider besides the purchase price?
In addition to the purchase price, you should consider the land transfer tax, notary costs, broker's commission, and development costs. Calculating the development costs early on is necessary to avoid financial surprises.
How important is transport connectivity for a commercial property?
Good transport connectivity is crucial for your business's accessibility. Ensure there is good access to public transport, the motorway network, and adequately sized access roads.
What does third party usability mean?
Third party usability means the property is also appealing to other industries and can adapt to changing needs. Assessing the property's suitability for future rental, taking into account potential demand in the region, is crucial.
How can Auctoa assist with location selection?
Auctoa helps you with expertise in property valuation and analysis to identify the potentials and risks of different locations and make the best choice for your business.
