Buying commercial real estate for your start-up business is no small matter, and should be carefully considered to ensure the financial security and commercial viability of your business in years to come. Firstly, it is important to determine if buying is the right decision for you, or whether you should be renting for the time being.
There are a lot of advantages to buying your own commercial property; for a start, mortgage payments are likely to be similar to rental prices on a similar property, but you won’t have to worry about increases and your interest payments are tax deductible. Having your own property means you have flexibility on how you design the premises to suit your business, and if the property increases in value, your business will benefit. However, buying does mean stumping up a large deposit in the first instance, which may not be possible for you. Not only that, but you will also have to finance the maintenance of the property over time. You also do not have as much flexibility to deal with changes to your business – whether that means needing a larger property to deal with growth, or moving to a different location altogether. Doing a cost analysis of your options, and considering your business needs will help you to make a decision.
Once you have decided to buy commercial property, there are a number of factors to consider before you start shopping around. Having a clear idea of the kind of property you are looking for will narrow down the search and save you time.
Location is a big factor when buying commercial real estate, and can really make all the difference to your business’ success. Depending on the kind of business, you may be meeting with customers on a regular basis; if this is the case, you must consider the importance of locating your business close to where your desired customer base is. Make sure that your property is accessible; space for customers to park may be advantageous, but if this isn’t possible, consider how close your business is to key public transport links.
You will need to ensure that your commercial premises provides enough space to both your customers and employees; this is a legal requirement and will depend on the type of business you are running. Many businesses make the mistake of buying property which suits their current needs, without considering how the business may change in the next few years. If your business is likely to grow, and therefore to need more space, consider factoring this in to your choices of property.
Find recent sales of similar properties so you’ll have an idea of how much you should be paying. Once you have an idea of how much the real estate you’re looking to buy will cost, you can look into financing the purchase. There are a number of different options, such as business loans and commercial mortgages. For those who are struggling with the financial side of buying property, companies like Swift Capital have a number of options to help you out when buying commercial real estate.
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