Tired of low returns from traditional investments? Commercial real estate offers a compelling alternative, potentially outperforming banks and money market accounts. While the residential market faces challenges, commercial real estate can present lucrative opportunities.
However, investing in commercial real estate demands a different approach than residential. The market dynamics and legal frameworks diverge significantly. Comprehensive due diligence is crucial. Always commission a property inspection and survey before closing. Pay close attention to easements, especially those benefiting the property.
While most associate easements with burdens like utilities, commercial properties often rely on easements for access and parking. For example, if access to your property requires traversing neighboring land, ensure these access rights are legally secured through easements, documented in the deed or a separate agreement.
A property survey is essential to identify all relevant easements. The title insurance commitment should legally describe these easements. The title company must thoroughly investigate not only the property you’re purchasing but also any properties granting you easements. This search serves several critical purposes:
First, it verifies that the grantor of the easement has the legal right to convey that interest. Second, it confirms that no encumbrances exist on the easement property that would impede your use. Third, it ensures that taxes on the easement property are current. Overlooking this could lead to unexpected complications, such as a tax sale jeopardizing your access. A new owner could demand payment or even block access to your property.
Crucially, engage an attorney specializing in commercial real estate. Residential real estate expertise isn’t sufficient. Commercial transactions involve unique complexities requiring specialized legal counsel. A knowledgeable attorney will guide you through the intricacies of this distinct market.