While the COVID-19 pandemic and the subsequent move to working from home has made life difficult for some commercial property landlords, businesses can boost their success by acquiring the right commercial premises.
According to industry sources, commercial property accounts for 13 per cent of the value of all UK buildings and includes high street shops to large out-of-town shopping areas.
It also includes factories, industrial units, warehouses, restaurants, pubs, hotels, gyms and even car parks.
Do not over-extend yourself
When deciding on a property, care should be taken not to over-extend as interest rates are currently moving in the wrong direction, although historically still low, so factor in potential rises.
When somewhere has been chosen commission a full professional survey before proceeding. It may cost more, but will give greater peace of mind.
Like the TV show Location, Location, Location, where you buy is important. How big should it be? Is it accessible in a town centre for clients or is out of town more cost-effective? Are the business rates affordable?
Other factors to be considered in the decision could include:
Is it the right choice?
Is buying the right option for a new company, or would a short term let be better?
For more established firms, taking on a mortgage and buying the property is perhaps less of a risk.
Is there room for expansion with the property as your business grows?
Larger deposits for commercial property
Don’t forget that, as with a residential property, you will need to put down a large deposit.
Mortgage lenders are likely to ask for a deposit of 20 per cent or more of the value of the property.
Making money from the investment
Once inside the property, companies hit cash flow challenges and sub-letting could be a way of raising extra funding and covering mortgage and other costs. Check with your lender to see if it is permitted.
Factor in those running costs
Running costs, particularly energy costs are rocketing at the moment for businesses.
Budgeting is key as routine maintenance of the premises can mount very quickly. Set funds aside for this and be ready for unpleasant surprises.
How accessible is it for staff?
City or town centre locations are usually served by decent bus, train or tram services, but providing parking is a real perk for staff who prefer to drive.
For those with a bigger operation, an out-of-town site with more space could offer better parking facilities as public transport may be less frequent.
Thinking of buying a commercial property? Contact our team today for advice.