The advantages of buying commercial premises
Many businesses won’t have the option to purchase their own commercial premises, with potentially substantial deposits proving an insurmountable roadblock. Leasing is by far the most common route for businesses in the UK, but for those with the budget, there can be many benefits to buying commercial premises.
- Property Value – Buying business premises means that you will reap the benefits of any future increases in the value of your property. If it’s worth more in a few years, the investment will have paid off, but there’s also the risk that the property could decrease in value over time.
- Flexibility – Buying a property means it’s yours to do with as you please. This can open up design options and operational variety that might not be possible when renting. However, this does leave the owner responsible for the upkeep and safety of the property, which could cost time and money.
- Income – Owning a property can provide some lucrative income avenues in the future. Sub-letting part of an office building or industrial unit can bring in extra cash, while in the future it might be worth considering letting out the entire property.
- Fixed Payments – Rental prices can fluctuate depending on the state of the market, but buying with a fixed mortgage can provide stability to monthly costs. The downside is that the 20/30 percent deposit required for buying could have been spent in other areas of the business.
- Identity – Some businesses may feel that owning their own premises is a real show of identity and ambition. It can feel secure and be valuable asset to the company. With ownership however, comes responsibility and liability. It’s just about deciding whether the risks outweigh the benefits.
As with any business decision, there are arguments for and against buying commercial premises. The reality is that many businesses have no choice but to rent out premises, but for those that decide to buy there can be genuine reasons in favour.