5 Tips You Need Before Buying or Leasing a Commercial Property
If you are looking to purchase or rent a commercial property, there are important factors to think about before you sign on the dotted line. Whether you’re purchasing or leasing a unit for an office, restaurant, bar, retail shop, or a warehouse, it’s vital to consider all the different factors involved before you make a final decision. Your business’ premises can have a huge effect on several different
aspects of your company, including reputation, profits, marketing, and much more.
That’s exactly why it’s so important to make sure that you take everything into careful consideration before choosing the perfect premises for your company. Signing a lease or making a purchase of a building for your brand should never be something that you rush into. We’ve put together some of our top tips to make sure that you make the right decision.
Tip #1. Consider the Area:
When choosing new business premises, one of the most important things to take into consideration is the location. For example, if your business is a restaurant, bar, or a retail store, choosing the right area is crucial since it’ll need to be easily accessible for both your customers and your employees. Customers might be put off coming in if it’s difficult for them to get there, and a poor location could make it difficult for you to hire the best employees. If the place does not have good transport links or the salary offered doesn’t make transport costs worth paying, it will be harder for you to employ the right staff.
The location of your premises will be more important if your business is a start-up, as it’s more likely that you’ll be hiring young graduates getting their foot on the career ladder and, therefore, more heavily reliant on public transport to get to work rather than having the security of their own
Tip #2. Think About Your Cash Flow:
One of the most important factors to consider when getting new business premises is exactly how much it’s going to cost on a regular basis. Don’t just think about the cost of the lease or mortgage; you’ll also need to take into consideration expenses such as council tax, utility bills, and insurance for the property. Any new business owner knows that watching cash flow carefully is key, so it’s
important to make sure that you’re not spending more than you can afford on business premises. If you’re just starting out, it might be worth considering leasing a smaller, cheaper property with plans to upgrade in the future when your company is in a better financial position.
This could also be the case for larger, and more established businesses, too. For example, if you want to keep regular expenses low, it could be worth leasing a property in a prime location but opting for a unit that’s off the main road to take advantage of lower rent prices.
Tip #3. Decide Whether to Lease or Buy:
Of course, the decision whether to lease or buy your business premises is a massive one to consider.
Leasing can have many advantages for new businesses, particularly if you want to keep your initial costs low and have plans to upgrade and relocate to larger premises in the future as your business expands.
On the other hand, buying a commercial property can also have massive advantages if you have the capital available. Buying your premises gives you more freedom when it comes to making changes and upgrades, and you won’t be required to stick to stringent lease rules and requirements. If you’re unsure as to whether leasing or buying your business premises is the best option for you, a commercial property lawyer like Harper James Solicitors can iron out any concerns and offer more information. They will be able to arrange out any agreements and help the process.
Tip #4. Keeping in Line with Requirements and Regulations:
Before you make a decision on business premises, it’s vital to ensure that you’re able to keep in line with any building rules and regulations. This is likely to happen whether you decide to buy or lease, but leasers tend to have more rules to adhere to.
If you’re planning to buy your commercial property, then it’s important to conduct a thorough survey beforehand to ensure that all building regulations are adhered to. More often than not, this will be from a health and safety point of view. The last thing that you want is to put a deposit down on a property and pay out a large amount in legal fees, to find that there are harmful substances present or that the building is not secure. This could end up costing you even more in the long run as you will most likely be unable to trade until the regulations are met.
Tip #5. Consider Your Return on Investment:
Last but not least, if you’re considering buying your business premises, it’s important to consider its value, and whether or not it’s likely to hold it over time. For example, if you plan to sell your business and your property one day, will it hold its value and earn you a good return on your initial investment? Even if you have no current plans to sell up in the future, it’s always worth taking this into consideration in case things change down the line, for example, if you end up retiring early or find that selling your business could be more profitable than continuing to run it.
Don’t just consider the building itself when it comes to determining whether or not it will provide a good return on your investment. The area will have a huge impact; think about what is nearby, and how convenient it will be for both customers and employees to reach the premises in the future. Areas that are currently undergoing development are often the best to invest in since there’s a high likelihood of total area improvement in the future, which can positively impact the value of your business premises.
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