In the same format as buying a home, purchasing a rental property takes serious thought and a great deal of research. However, the decision you make can have a severe knock-on effect on the success of your business. Finding the right business base isn’t plain sailing as there are so many factors to consider, especially if this is your very first time buying a commercial property. Making the wrong decision could lead to disastrous consequences, as opposed to making substantial revenue. In this blog, we’ve put together a list of factors to bear in mind when buying a commercial property to make the very best decision possible:
Carry out research
Before making any decisions concerning a commercial property purchase, it would always be worth researching the type of property that’s most suitable for you, in the most desirable location. Some of the most common types of commercial properties include offices, warehouses and retail spaces, so it’s important to acknowledge how you see yourself and your staff carrying out typical day-to-day duties to determine which is most appropriate.
Ask yourself whether the property will suit your needs both now and in future, with the following pointers:
- The potential to extend
- Parking facilities
- Transport links
- The potential to convert for a different use
- Enough space for equipment and staff members
Buying or renting
One of the biggest decisions that business owners must make is whether to rent or buy the premises. Renting is beneficial for entrepreneurs who are relatively new to the market and are still finding their feet as to what is most suitable, whereas buying a property is beneficial for the long-term and allows you to make the relevant amendments to the space (if you receive the relevant planning permissions). If you currently own a commercial property and are looking to move with immediate effect, taking out a short-term loan from hard money lenders can help bridge the gap between the two properties and prevent losing valuable time.
Although you may only be considering the cost of the physical structure of the building, there are many other expenses associated with buying a commercial property. In the same manner, as purchasing a home, there’s a high likelihood you’ll have to purchase equipment and furniture, as well as paying various bills and ongoing maintenance costs. In this case, budgeting is key. Always have a buffer fund to fall back on in the event of an emergency to prevent you from falling into financial difficulty.
Letting out the premises
If the premises you are keen to purchase are extremely suitable for the future but don’t quite match your needs at the current time, there may be the option to temporarily let out the property. This is highly advantageous if you wish to secure a property that matches your business goals for the next few years without the risk of falling into financial problems, thanks to the incoming rent. However, do be aware that this option isn’t always available, so it would be worth investigating before committing.