The business of buying a commercial space for rent

Buying a business premises to rent out later can be a very profitable business in Spain. According to experts, The gross profitability of this type of real estate can reach 9%a not inconsiderable number, and it can be sustainable if the entrepreneur who pays the rent for the premises manages to be successful with his own business.

As the real estate portal explains casaktua, most buyers of commercial space are small and medium-sized investors who want to make long-term deals with the rents. However, the acquisition of a property of this type is reserved for a few in some Spanish cities.

In Madrid, the average price for commercial premises for sale is around 3,000 euros per square meter, after idealists. In the capital, the average rental price for these properties is EUR 19.50 per square meter square. The valuations in Barcelona are somewhat more modest, with rents of around EUR 15.90 per square meter and selling prices of around EUR 2,150 per square meter.

An entrepreneur who wants to work in this area would have to pay around 300,000 euros for a commercial space of 100 square meters in Madrid and would ask for almost 2,000 euros a month in rent. 24,000 euros per yearplus taxes, municipal expenses, spills, insurance, administration costs…

The keys to success in renting commercial premises

Also, the commercial rental business is a bit more technical and specialized than that of apartments or used cars. In this sense, it is necessary to know some basic aspects when evaluating the purchase of such a property with a view to renting it out.

  1. Location: The location where the business premises are located is the master key to getting the most out of this business. With this in mind, experts recommend considering the purchase of premises in busy areas, near public transport stops and avoiding direct sunlight on the shop window. If it’s on a one-way street, it’s ideally on the right-hand side.
  2. Assess the condition of the premises: Many of the premises for sale are not in good condition. Therefore, it is necessary to consider the possible imperfections in order to calculate the cost of a reform. In addition, depending on the business you want to set up in the property – a restaurant needs a smoke outlet, for example – you must find out about the structural requirements in order to receive a permit.
  3. Calculate the gross and net returns: As in any business, before acquiring a commercial property for rental, it is necessary to keep accounts and make profitability forecasts. Depending on the city and the neighborhood in which it is located, this number can vary significantly, in addition to the street-side location, so it is advisable to avoid surprises.

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