Naturally, choosing to purchase commercial property does have its fair share of benefits. To
give an example, you will not be particularly affected by rental increases. This allows you a
more precise degree of control with regard to your outgoing payments. You will also
undoubtedly enjoy a superior degree of flexibility with regards to designing the internal look and feel of the building. You may configure it for your own use.
Purchasing commercial property also has financial benefits. For example, you may find it is possible to sublet a portion of the property, which will help to decrease the payments you have to make with regards to a mortgage and increase your passive income streams.

Considering that repayments on a mortgage would be similar in terms of the total to what it might cost you to rent a commercial property, you will benefit from some degree of capital appreciation in the event that the value of the property increases.

Ultimately, there are things to consider if you’re going to own commercial property. As an example, the market value of the property can drop, interest rates can increase, which means that the property could become a very expensive endeavour.

It’s definitely important to consider both the good points and bad points of buying into
commercial property. But, if you decide that it is still for you, then there’s a couple of different
things that you need to think about, and some criteria to consider.

You need to ensure that the location is suitable for the type of business you plan to establish. Whether you choose to purchase the freehold or opt for a leasehold, selecting the right location is crucial, as it can ultimately determine the success of your business. Evaluate the local area by considering what other businesses operate nearby and how accessible the location is for your customers, including transport links and local parking. Additionally, think about foot traffic; if you intend to open a retail business, choosing an area with high footfall is ideal, whereas office spaces may not need as much. If your business requires the transportation of heavy goods, assess the HGV access and consider how it might impact the local community. Ensure that the roads and infrastructure can support large vehicles without causing significant disruptions. Consider the hours during which deliveries can be made, as restrictions may apply to reduce noise and traffic in residential areas. Also, think about any potential zoning laws or regulations that might affect your operations, ensuring that your business can operate smoothly without facing legal obstacles. By carefully evaluating these factors, you can make a well-informed decision that supports the long-term success and growth of your business.

When considering whether to buy or lease a commercial property, it is imperative to engage in thorough financial forecasting and conduct a detailed financial analysis. This process is essential to ensure that the decision aligns with the long-term financial strategy of your business and contributes positively to its future operations. If you opt to lease a commercial property, it is crucial to maintain sufficient capital reserves to meet quarterly payment obligations consistently. This financial prudence helps in ensuring smooth operations without strain on liquidity. On the other hand, purchasing commercial premises requires more extensive financial preparation. This often involves securing financing through avenues such as mortgages or bridging loans, where typical deposit amounts range from 20% to 50% of the property’s value. Adequate financial planning in this scenario is vital to manage ongoing mortgage payments and operational costs effectively. For personalized financial advice tailored to your specific situation, our team comprises qualified brokers with expertise in assessing financial viability and providing recommendations that align with your affordability and business goals.

When deciding between purchasing a freehold or leasing commercial property, it’s important to consider various additional costs beyond the basic monthly rent or purchase price. Both options involve legal expenses, including solicitor fees for conveyancing and lease drafting. If opting for freehold purchase, you’ll need to account for Stamp Duty Land Tax (SDLT), which applies to transactions of £150,000 or more for non-residential or mixed-use properties. Moreover, all commercial premises are subject to business rates, adding to the ongoing financial commitments. In conclusion, whether you choose to buy or lease a commercial property, it can be a significant financial commitment. However, it can also be a strategic investment that enhances business productivity and opens new revenue opportunities. For tailored advice on selecting the right commercial property for your business needs, please feel free to reach out to our team.