Pros and cons of buying business premises

Introduction

Overview

What We Need to Know

Pros and Cons

Repayments

Types of Lender

Getting a Quote

Buying commercial premises can be a good investment - owning a property gives your business stability, and the property itself can become a significant asset. However, it is a major step, and before you commit it is important to think carefully about the pros and cons.

There are considerable advantages to buying:

your mortgage repayment is likely to be similar to a rental payment on the same property
you aren't exposed to any hefty rent increases
you may be able to sub-let any free space that you might have - however, you will almost certainly require permission from your lender to do so
interest payments on a commercial mortgage are tax-deductible
any gain in value of the property will increase your capital

There are also disadvantages:

unlike renting, you'll need to come up with a substantial deposit - this is money that might be used for more important business purposes
if you own premises it's far harder to relocate your business, extracting yourself from a rental agreement is much easier than selling premises or finding a new tenant to take them over
if you have a variable rate mortgage, you are exposed to increases in interest rates
owning a property means you'll be responsible for factors such as maintenance, fixtures and fittings, decoration and security
any loss on the value of the property will decrease your capital

GET A QUOTE

If you would like a quotation, please use our Mortgage Quotation Wizard and we will ensure you get the best deal available for your business.

Mortgage Wizard

If you prefer to speak to a mortgage consultant, please visit our contact page and use the contact method you prefer, Email, Telephone or Post.

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Reproduced with the permission of Business Link (http://www.businesslink.gov)