For a business that is growing, a major milestone is opting to purchase a commercial space, rather than rent one. Whether you’ve had your dream restaurant location picked out since your business’s inception, or you’re looking to permanently relocate, this can be a very big step.
After all, this is the place you’ll come every day, it’s the location that will belong to your business and will be what your customers picture when they think of you. Plus, for those who have never bought a commercial property before it can be hard to know what to look for.
Discover our tips for buying your first commercial property to put you in good stead for this milestone.
Find the finance first
For most people, getting finances in order before any property purchase is the first step, and buying commercial property shouldn’t be any different. Whether you want to look for financial assistance like a commercial mortgage, will be buying from business profits or even purchasing a space out of your own personal funds, knowing you have the money available to spend is imperative.
Pete Mugleston, the Managing Director at Online Mortgage Advisor told us: “My absolute top tip for buying commercial property would be to find the finance first. So many commercial clients waste a lot of time searching for and agreeing terms on a property, only to then struggle to get the money together. If you have an idea of what you want, speak to an expert about getting the maximum serviceable loan amount first, establish what the business can afford and what level of deposit/additional security might be required, and then start properly hunting for something in your price range.”
Andrew Farnell, a Partner at Harold Benjamin Solicitors echoed this, telling us: “Set a budget and stick to it. Will you need finance from a third party to fund the purchase such as a commercial mortgage? If so, research the options available to you at an early stage.”
Also, on the point of finance, Andrew advises that you ask: “Is VAT payable on the purchase price? This will increase the amount you have to pay by 20%.”
Accessibility is absolutely imperative for any commercial property and knowing that the space you buy is either already as accessible as possible or has scope to be upgraded is a must.
When it comes to your staff and customers, the Equality Act 2010 says that a business must be seen to be taking ‘positive steps’ in order to remove any barriers for those with disabilities. Failure to do so can be viewed as unlawful discrimination, whether from a customer or staff perspective.
A space being accessible can mean a lot of things: ensuring universal wheelchair access, installing a disabled platform lift between floors and providing extra aids and services where needed are some of the factors that can apply.
When looking at a commercial property, it’s worth seeing what accessibility features it already has, allowing you to budget for any extra you would like to implement moving forward.
Learn more about the location
When talking about buying any kind of property, it really is location, location, location. For your commercial property, perhaps you’d like to stay local to your origin location, or perhaps you are looking to move to an area that is growing in popularity? Knowing the landscape of your desired location is key.
From knowing what similar businesses are around that you may compete with, to knowing about potential building ventures going on which may bring more footfall in the future, researching your desired location is very important. Consider how your business would fit into the local community, and how the landscape of that community might change in the coming years.
Don’t rush into a purchase
Although, once you’ve got the finances in place and are ready to move, it may be exciting to rush into something. Don’t move too quickly, however, and make a decision you may regret down the road. Andrew explains: “Don’t be too hasty to buy and have regrets later. Wait until you are sure you have the right property, in the right location, at the right price.”
A good way to know you have the exact right property for you is to create a list of ‘must-haves’ before you look at your first place. Create a circled location you’d like your space to be in, note down what space requirements you have, what parking you may need; anything that is vitally important to your business. Then, compare each property you see to this list and ensure it meets, or has potential to meet, your standards.
Once you’ve found your dream space, Andrew also suggests you get both a third-party valuation “to ensure you are not paying more than the market value” and a structural survey “to ensure the property is in good repair and structurally sound”. Two pieces of sound advice.
Think about longevity
The stark difference between buying a property, as opposed to leasing, is that you’re more likely to be there for a long time. So, you should certainly think about longevity. This can mean having some honest conversations with yourself and your business partners in order to have a road map for every eventuality.
If your business weren’t to succeed, what would you do with this space? Is it flexible enough to make renting it easy, or perhaps a conversion? If your business were to take off, would you be able to expand in this space, or would you quickly find yourself needing more space? Having a rough plan in place for all outcomes can let you know whether there are any potential issues that may arise in the future, and have you putting out fires before they even start.
Tips for buying your first commercial property:
- Find the finance first
- Consider accessibility
- Learn more about the location
- Don’t rush into a purchase
- Think about longevity
If you are looking to invest in your first property, we hope these tips can help you make an informed decision and realise your business dreams. If you already have your own space and are looking to make it more accessible with a commercial lift, or are looking for lifts for residential homes, we can help. Contact us today to find out more, or to read other articles, take a look at our news page.