Arguably the biggest question a business owner will face in relation to their commercial property is, “do I continue to rent, or do I invest and purchase my own property?”.
Of course, both options have positives and negatives but there are some key benefits as to why you should own your own commercial property. Yes, the initial purchase will require a substantial amount of capital but with competitive interest rates and lots of funding options available there is no better time to complete the purchase. Let’s explore more of these benefits:
- You have no control over the rental costs of a property, at any stage you could be faced with an unexpected increase. By purchasing your own property, you can secure the financial future of your business.
- Year on year the capital value of the business increases thanks to the continued rise in the value of the commercial property. Also, when you are ready to sell the business then the total property value will contribute significantly to the overall value.
- Having ownership of a commercial building gives you complete flexibility. You can design the layout to meet your exact needs, you can change and adapt to suit your business and you can even free up space to then rent out part of the building to generate additional income.
- The commercial mortgage sector is vibrant and there are some excellent rates available. The affordability of a commercial mortgage in comparison to rental rates is incredibly competitive.
So once the decision has been made there are some key steps to take to secure a funding for a commercial property:
- Evaluate your finances and draw up an affordability scale. This should include standard monthly budgeting along with provision for unexpected expenditure.
- Try to make sure you have a deposit available; this will help to secure the funding quicker and will also help to lower the cost of monthly repayments.
- Seek specialist advice. Firstly, discuss your requirements with your Accountant and make sure all the figures you have created are accurate. Next speak to a finance broker, they will be able to assist you with your application and match your funding needs with the right lenders.
If you have any questions with regards to investing in commercial property, please call us on 01993 706403 or e-mail enquiries@ngifinance.co.uk.