Investing in Property?

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Use This Checklist To Decide If The Time Is Right for You

Investing in a property, whether it is a buy-to-let, your own home or a business premises, is a big purchase with serious and long term financial implications.

Property of any kind is a long-term investment, a plan that could reap dividends for you and your business.

But the property market fluctuates. It can ride high for years, with investors making big gains when they sell or, it can be a depressed market place, with buildings hard to sell and profit even harder to come by.

But, invest wisely and your property investment for your business will bear fruit. If you are considering this move, you will need to objectively examine the risks and challenges, as well as the opportunities, investing in a business property will bring.

And you have some big questions to ask yourself too.

1.    Is your ‘financial house’ in good order?

Buying – and selling – a property is an expensive process. There are conveyancing fees, as well as other costs that can soon accumulate, especially if there is an issue with deeds, land or the property.

Buying a domestic property can cost around £2,000, conveyancing fees and searches included. On business premises, it can be much more but is dependent on the solicitors you use, searches needed and so on.

More importantly is ensuring your accounts are in good order and that you have tight financial control over your business finances. This means keeping overheads low, ensuring profits remain high and have a financial plan and forecast for the coming few years.

Getting a business mortgage is as much about persuading a bank your business is a viable risk, and good for the money. You will also need a deposit for a property, unless you have some other way of financing a purchase.

2.    Is your business stable?

We have all come across fantastical stories of fledgling businesses making a meteoric rise to market dominance. And that’s great but we also known of businesses who have taken a significant tumble that has been decisive.

In other words, fast growth or any kind of growth is not necessarily an indicator of future success.

This can be avoided in part by not only managing your business well but understanding the changes in the market or sector in which you dominate. Looking out for the ‘next big thing’ or even creating it ensures your business is based on a firm foundation for growth.

There are no guarantees but investing in a property can help to underpin the stability of your business but. Get it wrong and it could bring it crashing down.

3.    What are the ongoing financial implications for your business?

You may think that owning a property means shelling out a mortgage payment every month but other than that, that it is.

There are, however, ongoing financial implications that total more than just your mortgage payment.

There may be various taxes and other costs and, as the owner, you are responsible for its upkeep. As a business premises, there are health and safety implications that mean you don’t have the luxury of time to solve some issues.

For example, if the one toilet is out of action that means you must have it repaired – and quickly. This can place an extra financial strain, as well as necessitating an onsite maintenance team to deal with these issues quickly.

4.    What is the property market telling you?

And finally, before you go hurtling headlong into buying a business premises, take a look at the property market: what it is telling you?

Is it telling you that there is a glut of properties, at great prices and ripe for the taking? If so, it means the market is sluggish and could be the chance you are looking for to snap up a lucrative property deal at a bargain.

Or, it could be that properties are being ‘flipped’, that is bought and sold quickly for profit. This buoyant market can make It difficult to get in on the act and buy the property you need, at the right price.

Build your own

There is another option and that is to buy land and build your own premises. With modern, sustainable modular construction techniques, you can create anything from an office block, to a state of the art health care facility.

Quick to build and far more cost-effective that buying into bricks and mortar, modular building is an affordable way for a business to create its own HQ. Over the coming years, as the business expands, your property can be extended– quickly and easily, and at a fraction of the cost of selling and buying somewhere bigger.

Are you ready to buy?

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