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Things to consider when purchasing property for your businesses

It can be stressful finding a suitable property for your business. Location and type of premises can have a significant effect upon the success of your company. Consider the following points.

iBusiness Blog - Property Commercial

Location

It is important that the location of your premises reflects the type of business you have. Those relying on passing trade will need to secure property in a central location, such as a high street or town centre, where there is a high footfall of potential customers. However, if you own a specialist retail outlet, or simply need an office, it might make better financial sense to look into purchasing property out of town. Here premises are often cheaper and more spacious. They can also benefit from more parking for staff and clients. Property agents with good knowledge of the area will be able to recommend the most suitable location for your business.

Space and type of premises

Consider the amount of space you will need and any particular requirements for accommodating equipment. Looking into the long term, think about any plans for expansion you have and whether the property will be flexible enough to allow for these to take place. Also bear in mind what facilities you will need. Do you require parking, meeting rooms, storage or any specialist areas? Ensure all utilities are available and that high-speed broadband can be easily accessed if you need it.

Choosing the right premises can be tricky and should not be rushed. Compare different locations and properties and their asking prices. It may be helpful to talk with other local businesses to gain an insight into the area. Making the right choice first time is essential to avoid an expensive relocation. Commercial property lawyers should be consulted for advice.

Legal requirements

You might have to choose between a mortgage, a tenancy/lease agreement or a licence agreement. The type of arrangement you decide or are offered may depend upon how much flexibility you would like. If you are looking for a short-term occupancy, a licence arrangement may be the most suitable option.

Regardless of the type of occupancy you choose, you will be expected to sign a legal document that places responsibility for financial and other such obligations in your hands. It is highly recommended that you seek legal advice before signing any agreement. Property solicitors will be able to talk you through any potential issues. Terms might include rent, mortgage payments, repairs, permissions and insurance.

Rent or mortgage payments

Rent is usually charged upfront on a quarterly basis. If you are a start-up company you may be able to negotiate monthly payments instead. Bear in mind that rent may be reviewed and increased at some point in the future. On occasion, a period of rent-free occupation can be secured. This could help absorb the costs of any renovations you need to carry out. Remember to obtain consent from the owner before commencing major works on the property. You may also wish to include a break clause within your agreement. This will enable you to finish the lease early should you need to. Service charges may also be applied in addition to your rent. Negotiate the terms of this before signing any legal documents. Business rates and charges for other services such as fuel and broadband can be a significant expense and should be considered before you take on the responsibility of any property.

Repairs
Before signing a lease agreement, check who will be responsible for repairs. Contract a surveyor to assess the condition of the property and ensure the lease states limited responsibility in the terms.

Permissions
Check that you are permitted to use the property for the purpose you intend. Planning permission is required for certain types of business.

Insurance
Responsibility will rest with you to ensure you are properly insured. This includes buildings and contents insurance, as well as public liability insurance.

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