Can you be the landlord and tenant? Well why not! If you own your business, it may make sense to own the property you work from. Not only will it rid you of that nosey landlord, but it’s an investment in your business.

Deciding to buy can be a big decision. So here are our tops 5 considerations when making this decision:

  1. Who is paying the bills?
    As a commercial tenant you not only pay the rent, you also have to pay for all the outgoings i.e. water rates, strata fees and often maintenance and building repairs. Which is why commercial property is such a good investment for the landlord but not necessarily for the tenant.
  2. Pay off your own debt, not someone else’s!
    As a tenant paying rent to someone else can be classed as dead money as all you are doing is helping the owner pay off their debt or fund their retirement.
  3. Safeguard your tenure.
    As an owner there is no need to worry about rental agreements coming to an end that may not be renewed, rent increases, redevelopment clauses etc. By tenanting your own property, you’re in full control of your occupancy.
  4. Invest in adding value for now and the future.
    Any money you spend on fitting out or improving the property is spent improving or increasing the future value of your property and not someone else’s. But best of all you’ll benefit from those additional features whilst working from the premises yourself.
  5. Ensure you’re top of the list.
    When purchasing a business, and the property is not for sale, why not request a ‘first option to buy’ to be added into your sale contract.

Whilst not all situations are the same, in many cases borrowing up to 100% of the purchase price can cost no more than paying rent! It’s critical to secure the right financial structure from the beginning to avoid pitfalls later on. You’ll want to save on stamp duty, allow for capital gains tax concessions as well as ensure you’ve got some spare change to run the business.

At Credabl, we are happy to sit with you and run through your options and work out the sums to see if what may fit your situation best. Contact us today if you’d like to have a chat.

 

If you enjoyed this blog, you may enjoy reading Practice Property Debate: to rent or buy?

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