Knowing whether or not to invest in your own property to run your business can be a tricky prospect. Whilst there is a comfort in knowing you own the building, you will also have a responsibility to upkeep the building to ensure it is safe for both production needs and employees safety.
However, renting a building can remove this responsibility; it also leaves you at the property owner’s mercy regarding what you can. It can’t do much, in the same way, renting a home would have restrictions.
But the options both remain, and the decision on whether or not to purchase or buy your business premises is something you should think carefully about.
Renting Your Business Premises
There are many advantages to renting your business space. Most obvious ones include that you know where you stand, you pay your deposit and rent via monthly payments, and you have the option to stay or move on to more suitable premises once your business evolves.
Renting also allows you to slot into premium spaces where there is no option to buy, such as busy shopping centres and complexes and of course, lower maintenance costs that your landlord will cover.
A drawback to renting is that you won’t be fully free to do as you wish and will need to run any changes through your landlord to make sure you can do what you want. For some people, this is a small compromise.
Owning Your Business Premises
Opting to purchase the property where you wish to set up your business can allow you more options and flexibility regarding costs and adapting the building. Firstly, you can fix lower costs for repayments on loans you take out to purchase the property. This can help you start with lower costs. You also have the option to sublet all or part of the property. If there are rooms you aren’t using; you can choose to sublet them and choose to stop trading or move to more purpose-built property, again you have that option to allow you to make money on a rental income.
Potential drawbacks that can put people off buying their property location are initial outlay costs and the large deposit often needed to secure a mortgage for this type of property – often 40%. You will also be responsible for keeping the property by removing asbestos or adding elastomeric roof coatings to extend the lifespan of your roof.
While both options have benefits and drawbacks, there is a reason to choose one over the depending on the type of business you are in and what your plans are for your company. Whatever option you choose, make sure you enter into it fully informed to make sure you are happy with your decision. You will also need to submit planning applications should you wish to change the building’s use or make changes such as expanding square footage or adding buildings on the land you might own.