Business premises can play a huge part in the overall success of your business and when it comes to purchasing commercial property, you should be well informed as to what the pros and cons are.
While most business – especially start-ups – choose to rent their business premises initially, there are many advantages that come with buying business property as opposed to renting. These benefits include flexibility and the opportunity to secure a sizable profit in the long-term. However it is important to note that there are a number of factors to consider when buying commercial property that you may not necessarily have to take into consideration when leasing.
The team at property investment firm Hopwood House will be taking a look at the advantages and disadvantages of buying a property for your business, as well as informing you about associated costs and all the boring (yet really important) legal stuff so that in turn, you can make savvy and informed investment decisions regarding commercial property.
The Million Dollar Question
Cash flow is the main barrier between business owners, entrepreneurs, and potential business premises. Before browsing the market and getting ahead of yourself, you need to work out whether purchasing commercial property is a financially viable option. The last thing you want is for your business to be left in financial hardships in years to come as a result of insolvency.
It isn’t just the cost of purchasing the property or mortgage repayments you have to anticipate. There are also a few hidden and ongoing costs that you may not have thought about. These can include repair and maintenance fees, utility costs such as electricity & heating and local authority charges for services including bin collection and parking.
While fees and charges can be a huge barrier in your journey to securing new business premises, there are certain schemes and allowances in place that will help cut costs. Your business could qualify for capital allowances, which help fund the cost of renovations to your premises – you can check whether your business is eligible by contacting your local authorities.
You can also make savings by optimizing your business property and maintaining and inspecting energy-consuming applications such as air conditioning systems so that you can reduce the cost of energy bills.
So, you need to ask yourself the million-dollar question – “Can I afford this?” If so, then your adventure as a commercial property owner is only just beginning.
Location, Location, Location
Although money is the driving factor when it comes to purchasing commercial property for your business premises, the location of your property also plays a critical role in both the success of your business and the impression created.
Undoubtedly the location of a property will be reflected within the price, but paying a little extra for commercial property in a prime location could result in some seriously lucrative returns and benefits for your business. If your business relies on ad hoc visits, then being positioned in a location with a high footfall is an absolute must.
On the flip side, if your business trades on an online basis only, or with other businesses and doesn’t rely on enticing passerbys, then choosing a premises away from the hustle and bustle of the city could be a great (and far cheaper) option for you.
Of course, there is no point choosing a location if it doesn’t reflect your business as a whole (we will be taking a look at this in more detail next) – so if possible, search for business properties that are situated in an appropriate and desirable environment and also frame the context of your brand, services and products.
Your Business Aesthetic
Now you understand the importance of location when it comes to purchasing commercial property, the next step is to make sure prospective business premises match the pre-established aesthetic of your brand.
Certain businesses will have developed a specific look that is reflective of the brand, services, or products and the premises you choose must visually reflect this. Whether you opt for a business park or high street business premises, make sure the exterior and interior design of your business property falls in line with your aesthetic.
It might take time to find the perfect business premises and revamp the interior to fit your business vision, but you’re sure to reap the benefits in the long term if you do so. If your brand aesthetic is reflected through all business elements, including your premises, then this will entice customers and, in turn, bolster sales.
The Boring Legal Stuff
Going through all the legalities that come with commercial property purchase can be tedious and boring, but we’re going to try and make it as simple as possible and get straight to the point. Just like with any other property purchase or investment, there are a number of legal obligations that you must abide by. From fire safety, health, and safety regulations, to planning permission and disabled access, your legal responsibilities seem never-ending. But once taken care of, you can sit back, relax and operate your business from the comfort of your very own property.
Choosing to utilize the services of a commercial property lawyer is a great way of making sure you fulfill all your legal responsibilities. Having an expert by your side who can offer helpful and impartial advice will make the purchasing journey as stress-free as it can be.
Don’t forget, once you sign a contract agreeing to purchase the property, it becomes legally binding – so make sure you’re 100% sure this is the right business decision for you beforehand.
With all that information in mind, you should now be confident as to whether purchasing commercial property for your business premises is the right option for your business or not. If you’re still not sure you can seek advice from both surveyors and lawyers who can help aid your decisions.
As a commercial property owner you don’t just benefit from flexibility when it comes to your business vision and budget, you also have the opportunity to enjoy massive capital growth upon resale thanks to a pricey market, as well as a steady income stream should you choose to lease the premises – it’s a win-win situation.