You need commercial premises but how to you choose what’s best for your business? Should you buy or rent the workspace? Boxpod has this advice for business owners ‘house hunting’.
Commercial property values are on the up, yet we are still a nation of commercial renters, largely leaving ownership to big firms. While we’ve seen a surge in private landlords buying-to-let in the residential world, it’s not mirrored in commercial market.
In our travels to units around the UK we get views from commercial landlords (private, public or their agents) and tenants.
Here’s what they have to say when it comes to deciding whether to buy or rent:
“Look at the finances. Can you afford to buy long term? How long has your business been going? Are you paying more in rent than you would if you had a mortgage on the premises?”
“Remember to look at the bigger picture, do you want to concentrate your time and efforts on your product/service/business or the bricks and mortar of the actual warehouse or office you operate from.”
“It’s worth speaking to financial advisers about your pension options. Subject to pension scheme rules you may be able to buy your trading premises via the SIPP (Self Investment Personal Pension). This could be beneficial tax-wise.”
Work out the true cost of buying. Here’s a quick checklist:
Purchase price, mortgage repayments, Legal fees, Business rates, VAT on the premises, Surveys, IT Costs, Repairs, Removal costs, Furniture and fittings, Health and safety issues
Also consider:
Car parking – for staff and visitors.
Proximity to local amenities, transport links, commuting time and cost from home for you and staff.
Check out neighbouring businesses – are they similar to yours? Is there competition in and around the site?
Once you have a shortlist of premises, ask yourself these questions:
Is it dated? Has it had many offers? How long has it been on the market? Is it privately owned or in a pension scheme? Is it VAT Exempt? Is the central heating system/ air conditioning up to date and in good working order? When was it last rewired and is the trunking up to date for networking? Parking issues with other business? Any signs of subsidence problems? Can we downsize or upsize within the building – can we sublet part to earn rental income? Check for hidden extras
Beware: Check the history of crime or break-ins for security and insurance. Look out for asbestos. Watch out for hidden extras, service charges. Always read the small print
And finally…
View the premises several times – go on different days of the week and varying times of the day. Have at least three site visits. Take a manager or a colleague for their advice.
Find your premises with Boxpod Property Search: