Everything You Need To Know About Commercial Property
As a business, inevitably you need to always be thinking about the bottom line, working towards maximising profit margins and business productivity for business growth. One of the major considerations tied to the bottom line for most businesses is the business premises.
Almost every business will need a base to work out of, whether it’s a retail outlet in Birmingham city centre or office space in Derby. But the world of commercial property can be a little complicated when deciding on whether to rent or buy, so here’s everything you need to know about commercial property to ensure you make the right business decision for the future.
Renting or Buying?
One of the first things you need to decide on is whether to buy or rent it and there are pros and cons to both, which are very much dependent on your business needs, requirements and expenditure.
Buying commercial property can be expensive, particularly if you are looking to buy in an expensive area. If you don’t have sufficient capital, you may be forced to buy outside of your core area, which could limit your business potential.
However, if you lease commercial property, you don’t need capital upfront and the rental payments are generally more affordable. In turn, this can give you a better choice of properties in better areas.
It’s also important to consider the responsibilities and potential restrictions that can come with commercial property. If you own your commercial premises outright, you are solely responsible for the maintenance of the building even if you decide to rent it out at a later date. Therefore you will need to budget for the upkeep costs, any unforeseen issues, renovations and such. On the plus side, if you choose to make any changes to the building, you have carte blanche on how it’s done.
If you lease commercial property, building maintenance and costs are not your responsibility, but commercial property landlords may require payment of an annual service charge. This goes towards covering the cost of general maintenance, but the building owner is responsible for arranging and paying for it to be fixed. Additionally, with leasing you may be restricted on what cosmetic changes you can make to the building, requiring the landlord’s permission.
Look to the future
As always in business, you need to also consider future business growth and expansion. Owning commercial property may require you to wait for the property to sell in order to free up capital to invest in new premises or to find suitable tenants that takes time. Whereas with leasing property, you can expand and downsize your workspace more easily once a lease agreement ends, which can afford more flexibility.
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