Buying real estate

Upfront / Initial Costs

• Security deposit and advance rent: Many landlords require one or more months’ rent up front.
• Tenant improvements and build-out costs: If the space needs to be modified to suit your business (walls, wiring, signage, etc.), you may have to cover those costs.
• Legal and administrative fees: These include lease negotiation, attorney review, permitting and compliance.
• Moving costs: These include furniture, signage, and IT/telecom setup.

• Base rent (often quoted annually or monthly per square foot) and scheduled rent increases over time should be considered.
• Common area maintenance and shared building expenses like landscaping, cleaning, or parking lot maintenance will come into play.
• Property taxes and insurance premiums of the building (often passed to tenants in certain lease types) will need to be covered.
• Utilities, janitorial services, repair, and maintenance costs apply as well.
• Renewal/relocation risk: At lease end, you may face increased rent or need to relocate, which means moving costs.

Acquisition Costs

• Purchase price: This is the cost of the property or land.
• Financing costs: These include down payment, loan origination fees, interest payments, appraisal, closing costs, title insurance, and inspections.
• Due diligence costs: These include property condition inspections, environmental assessments, surveys, and legal zoning review.

• Property taxes and insurance: This is an annual or monthly expense, depending on your policy.
• Maintenance and repairs: Regular maintenance and repairs are needed on major structural items.
• Property management: This includes operating expenses for the building or a management company.
• Renovations: This includes if you need to renovate the interior of the space, purchase furniture, or add signage to the exterior of the building.

These upfront costs can quickly add up — that’s where small business financing can help you navigate this major investment with ease.