Clayton, NY · Member since 2015 · 157 posts · 35 votes
I'm looking to find out some information on turning a residential SFH into a commercial office space.
I have a property in mind that has been on and off the market at a fair price for about 3 years now. I don't believe that the property has much potential as a rental or reselling it as home because of it's location on a busy street near many businesses in the middle of the city. However, I do believe that turning it into a commercial office space would give it more value. So with that in mind, what are the steps one would take should they decide to turn a residential zoned property into a commercial office space? Any drawbacks? Things to keep in mind when deciding if this would be a good move?
Talk to your local buildings department. It may be more beneficial to bulldoze and rebuild depending on the area. Land value will be the deciding factor. If it's of low value it probably is not worth the effort. Your tenant turn over and lengthy vacancies in a commercial rental will be a killer.
Consider if it had the potential why has someone not bought it for their own business.
Clayton, NY · Member since 2015 · 157 posts · 35 votes
9y
@Thomas S. Good thought. According to the tax assessor, the land is valued at $8,700 and has a total assessment of $67,300. Bulldozing it down and starting over didn't occur to me but that is something I'll start looking into. New builds are something I've wanted to get into and this may be a good way to start.
Investor · Moseley, VA · Member since 2016 · 49 posts · 28 votes
9y
@Account Closed - another consideration may to niche market to a single dentist or orthodontist practice; or a sub-practice location of a larger practice. A commercial broker can usually find a few looking to expand. The high traffic count area around retail centers you describe are usually their target location - and commercial banks are rather friendly in loaning to established practices. I have seen quite a few SFH in our area placed in such converted homes; you would have to build in the upfit costs into the loan, but if the property is in overall good shape, a few cosmetic and ADA compliance touch-ups, with some interior modifications (mostly plumbing) could work.
Clayton, NY · Member since 2015 · 157 posts · 35 votes
9y
@Doug Poff and @Charles Wiegert Very helpful information from the both of you. I'll be looking into this further as I believe that leasing commercial office space is a niche that could be quite profitable if done right. I like @Doug Poff's suggestion about contacting a commercial broker, I have been in contact with one recently and will be giving him a call again to inquire about this matter to see if he can be any help.