If you have a business that occupies a commercial or retail space, then you may need to work on purchasing the building and stopping the payment of rent. The following questions will help you determine whether owning commercial property is the right choice for you:
Do you have the money?
This is a simple but very important question as most building purchases will need at least a 20% down payment and this could often become an issue for most businesses, forcing them into a cash crunch if they are not ready for it. Make sure you don’t do that unless you have the money.
Can you afford the mortgage?
Once again you will need to work on calculating the monthly costs and to figure out whether you can pay them, avoiding any cash flow issues you may have in the long run.
Can you make use of the write-offs?
If you have a profitable business, then the property ownership will help relieve your tax burdens. You will the chance to write off a portion of the cost of the building each year as depreciation, so you won’t have to worry about it too much. Another possibility is to handle the purchase of the building alone, then renting it out to the company for tax benefits.
Do you have a good building available for your needs?
You should check the market for more solutions so you can ensure you have a more favorable situation for your needs. A good and desirable location nearby and knowing that moving to a new location and fixing up a building will add up to the costs and will require more marketing efforts to update your customer base on the new location.
Will it help your investments grow?
Moving to a new place will mean you have to consider your growth plans as you handle this. Purchasing any building can lead to changes in the way you handle business in more than one way, so before making moving a reality you should consider how you will make it grow into something more practical and useful in the grand scheme of things.
Is this a good investment?
This is one serious question you need to ask yourself before you end up buying and moving your company to a new location. Do try to make a more emotionless assessment of the property you plan on buying, such as knowing whether it is located in a thriving neighborhood and whether it will be something your business can gain from. Are the prices going up or down, is the district empty or full of tenants that could add to your business visibility or not? Consider all of this and more before you make the purchase and moving of your business and you will have a much easier time handling everything in the long run. The more practical solution is often the more prudent one when it comes to businesses and large investments of this kind, so keep that in mind as you move on.
A the end of the day you will need to weigh the pros and cons of a commercial property upgrade and how it will tie in with the rest of the business you’re running. When it comes down to it you have control over the way the project will go, so we hope these tips were of use to you in making your choice.
This article is contributed by our friend Heather Roberts
More about Heather:
Heather Roberts is a freelance guest blogger from London, UK. She has great flair for interior design and home decor. Heather is searching for new challenges and hence often moves to different places and also tries to live an eco-friendly life. You can reach her through her Google plus account: https://plus.google.com/113030642518044253016