When buying commercial property such as an office, shop or hotel, you’ll need to make smart decisions. This helps ensure that you’re finding the right premises for your needs and investing your money wisely.
Here at Waldrons Solicitors, we know that it can be a lengthy process and you’ll have lots to consider.
With this in mind, we’ve gathered together our top commercial property buying tips to help you.
How to choose a business premises
1. Start with a plan
Think about your priorities before you start to search for the right commercial property. What would best suit your needs? What type of property would you like to invest in?
2. Know your budget
Do your research and then estimate costs to get a figure to guide your search. Don’t forget to include hidden costs such as:
● Professional fees.
● SDLT (Stamp Land Duty Tax).
● Construction and repair costs.
● Operational and maintenance costs
● Environmental compliance costs
● Waste management.
3. Look for a good location
If you choose the right location, you’re more likely to meet your ROI goals and grow your investment. This depends on the type of business you offer. Consider the local competition and whether it will be accessible and convenient for your target audience. [Read more on this below].
4. Research the local commercial property market
There are a unique set of values for each area which could influence your total overheads and the success of your business. Do your research and find out:
● Current value of similar commercial properties in the area
● Local tax and interest rates
● Availability of commercial mortgages
● Rental values
5. Find out if the property is eligible for capital allowances, BPRA and land remediation relief
The UK government aims to breathe new life into communities across the UK. For this reason, they offer various relief allowances that you may be eligible for.
Check with your estate agent to find out whether you can claim any of the following:
● Capital Allowance
● BPRA (Business Premises Renovation Allowance)
● Land Remediation Relief
6. Consider the possible ROI on the commercial property
How quickly could you gain your investment back? How could you put steps into place to help your profit to grow?
7. Think about the risks
As every business owner knows, there is always an element of risk when investing. Before you make a purchase, consider how you feel about current risks and any risks that could occur in the future.
8. Get a structural survey
Check whether there are any structural problems in the property that you’re interested in before you make your investment by getting a structural survey. They’ll help prevent any nasty surprises that could significantly affect your ROI.
9. Visit the property
Make one last visit to the commercial property before buying to double-check for any undisclosed or unnoticed defects that could become a problem. Although these should be disclosed by the owner, non-disclosure isn’t punishable by law so you need to be savvy.
Choosing a business premises
There are many details you should consider when choosing the right commercial premises to invest in. Follow the tips below to ensure you’re making a savvy decision.
The location you choose depends on the type of business that wants to occupy the premises. Commercial property in a busy area such as a town or city centre is likely to attract more customers but it could also cost more. This may be important for shops but is less problematic for other types of businesses.
Think carefully and find a balance between price and location. Also, consider:
● How easy is it for suppliers to deliver?
● Do you need parking and if so, is it available onsite or close by?
● How many staff members will need parking?
● Is the property close to public transport links?
● Are you happy to bring clients to your office?
How big do you need the commercial property to be? You need to ensure you have what you need without wasting space. According to current Health and Safety rules, you should allow at least 11 cubic metres per person, with a room height max of three metres.
Also consider what furniture, equipment or stock storage you need and ensure you have room for people to move around and use the equipment safely.
Finally, think about the growth of your business. Will the commercial property provide the space you need or will you have to move again in the near future?
What basic services do you require? Consider basics like power, plumbing, heating, phone and internet plus additional services such as ventilation and disposal of toxic waste.
Depending on your business activity, you may need special permission or a licence to run a business in the area. Find out whether it’s possible before you make your investment. If the property is currently used for a different purpose or you need to make alterations or extensions, you might need planning permission too.
Security & Access
Protecting your business stock or equipment is essential, as is ensuring that staff can access the building when required. Therefore consider whether the property already has the security measures that you need or whether you could add them and whether any access rules limit when you can be in your office, shop or other types of commercial property.
How to buy commercial property
When you’ve found the right commercial property and want to move forward, there are several steps you need to take next.
1. Check whether the building meets your requirements
2. Check energy costs and building rates
3. Check property class
4. Apply for a mortgage if required
5. Instruct a commercial property solicitor to deal with the legal aspects
6. Commission a building survey to identify any issues with the building
7. Find out about buildings insurance
8. Finalise the contract and complete your purchase
Need advice or help when buying a commercial property? Contact our team of commercial conveyancing solicitors today.