Businesses looking for premises will often choose to rent, but if you have some capital available for the initial investment, it's worth
considering the advantages of buying a property.
Buying premises has a number of benefits over renting. Mortgage repayments can work out cheaper than rental costs and at the end of the
mortgage term the property will belong to you.
You will also have a lot more freedom to do what you want with the property and you could generate income from the property by renting it
out or by selling it at a profit. However, there are still restrictions and regulations, and the legal process when buying a property can
be complicated.
This guide introduces you to everything involved, from choosing the right place to exchanging contracts. It also suggests where you can go
for more help.
Buying your own premises: advantages and disadvantages:
Most small and new businesses will not have the capital to make purchasing premises a viable option and opt instead for renting premises.
However for those businesses that do have the capital, buying a premises can offer a number of advantages.
Buying a property gives you the freedom to use it as you wish - subject to planning regulations or any conditions imposed by the bank. As
you are in control, you can:
» have more flexibility over the management or repair of the building
» profit from the building when you sell it, if it appreciates in value
» let the property in the future and receive another income stream
» move when you wish - you won't be tied to a fixed-term contract
However, there are greater risks and more financial commitment than with renting. Buying a property could:
» tie up a lot of your capital, which could be used to set up and invest in your business
» leave you with negative equity or the threat of reposession if you cannot keep up with mortgage repayments
» cost you a lot of time if you need to make alterations or do some building work
» make you responsible for the safety of the building - for example, you need to keep up to date with regulations for fire precautions and
health and safety, and implement them, though bear in mind that some leases also require this
» commit you to ongoing costs
