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Real estate becoming riskier for small businesses

On Behalf of | Dec 1, 2022 | Real Estate Law

Small businesses can get a lot of advantages from owning their real estate, as opposed to leasing it from someone else. When they are in a position to buy property, many of them will jump at the chance.

But the real estate market can be risky. Changes that are completely out of a business owner’s control can make the difference between a good investment and a disaster.

Interest rate hikes

Among these changes have been the recent interest rate hikes from the Federal Reserve. After many years of historically low interest rates, the Fed has been steadily raising rates over the past few years in an effort to curb inflation.

With the cost of borrowing going up, many potential homebuyers In New Jersey have decided to put off their purchases, and potential sellers have decided to wait a while before putting their homes on the market.

Small business owners face the same issues, but their calculations may be a little different. Some experts note that mature, well-established businesses have the capital to purchase property without worrying about interest rates too much, but the current economic outlook is harder for startups.

Legal issues

Although we usually talk about real estate in terms of money, property ownership is a legal matter. It’s important to handle legal issues Attorneys with experience in real estate law help small business owners to draft and execute real estate contracts — whether they are buying, selling or leasing — that will protect their investments and help their businesses grow for many years to come.