Everyone who buys a property does so with several goals in mind, one of which will be to make a profit when they sell it.The same is true for buyers investing a home, landlords in buy-to-let purchases and for businesses looking to invest in their own work premises, along with a business property portfolio.
All too often, however, the projected profit when selling a property doesn’t materialise. Property investors make mistakes and when they do, the profit margin is squeezed. As a business, you may have taken steps to invest in your business premises with a strategy in place that means one day, you will sell and at a profit. But what steps can you take to maximise the Return of Investment (ROI) in your property?
I. Location, Location, Location
The business premises in a certain part of town with a too-good-to-be-true price tag is priced according to what it can offer your business. And knowing it is in the ‘wrong’ location means the estate agent will price it to sell.
Location is important to any business so before you snap up a ‘bargain’, make sure it is offering you the bargain that you think it is.
Should you be buying in town or on the high street? Would an out of town unit or retail park be better? Should you be buying a business property at all?
II. Consider Building Your Own
Designing and building property is not just for the domestic market. For many businesses, their needs are so bespoke that the only real solution that fits is to create their own business premises.
Even with the price of land and the cost of building your own place, the overall cost is still less than if you bought somewhere ready built.
You can also create your own bespoke premises, such as part office, part laboratory, as well as enjoy the benefits of the latest sustainable method of building is. This leaves you with a well-insulated, environmentally friendly building that is cheaper to heat, as well as more comfortable and fitting perfect with your business ethos.
It is also an opportunity to create a landmark and an iconic looking building, if you so wish. This essentially marks your business out as unique, a perfect means of creating a thriving business whilst giving a positive ROI from your business property.
III. Sympathetic Improvements
Like a domestic property, there is no doubt that improving your business premises is the obvious way of adding value and therefore, improving the ROI on the property.
However, doing so sympathetically and in keeping with the property is essential. What is the point of adding an extension with more office space, creating an overly modern look that doesn’t fit with the building’s age and style?
There are some changes that add more value than others, so consider all the options carefully;
- Insulation and energy efficiency – top of the list in the 21st century is making your business premises are energy efficient as possible. Wrap your building in cavity or thermal wall insulation, and opt for double glazed windows and doors.
- Your own power source – utility bills are ever increasing but business premises are notorious for wasting heat (and by default, money). How many offices have you been to that are stuffy and so hot that the windows stand open, even in winter? Insulation will help this, as will investing in new heating technology. Consider the gentler heat of underfloor heating and invest in solar panels and/or a wind turbine to generate some, if not all your own energy.
- Restoration – in older buildings, there is a need to restore some parts of it. Whilst maintaining its integrity, you also want it to answer modern day working needs. It can be a difficult balancing act but it can – and has been – done.
IV. Rent It Out (or Part of It)
Investing in a property is a bold move for any business. Just like a domestic property, getting help to pay the bills is a shrewd move. And this is why many businesses buy a property that they know is too big, section parts of it into smaller units and offer parts of it for rent to other local businesses.
Is this a move you could make? It means less of monthly outlay on your part and possibly a small profit to invest back into the property itself.
Buying or Renting?
This all assumes that buying your own business premises is the right move to make.
In many cases, it can be. It shows potential trade partners and your current client base that your business is trustworthy and stable, growing from strength to strength.
Invest wisely in the right property in the right location, improve it and maintain it, and you can expect a high level of return on your initial investment.