If you have enough capital to buy your own business premises then there are several potential advantages to buying over renting. Put simply, buying your own business premises will generally allow you more freedom; freedom to use the properties as you wish, alter them to your needs and sell when (and if) you wish.

In more detail, owning your own business premises will offer:

  • The choice of whether to occupy the properties yourself, sell them, or rent them to others.
  • Less restrictions on making changes to the buildings themselves in order to suit your specification (this is of course subject to some legal restrictions).
  • Relatively fixed costs. When compared to rents, which can increase over time, if you have a fixed-rate mortgage, you could have more stability in your costs.
  • The potential benefits of selling after a long period of time, if the value of the property has risen.
Eldon Way Trading Estate by John Allan

Eldon Way Trading Estate by John Allan

However, there are several factors which should not be overlooked when deciding on whether to buy or rent business premises:

  • Buying can be time consuming and will leave all the repairs and maintenance of the property up to you, which could be a financial drain if there are any unforeseen problems.
  • You may find the property value has fallen for whatever reason and if you need to sell the property this could mean great potential financial loss unless you sell to a company like Swift Capital to minimise the loss.
  • There are also health and safety precautions (including fire regulations etc) which must be considered, as this would be your responsibility.

It is a difficult decision whether to buy or rent premises for your business, and it is one which should be considered carefully. Although buying your own premises will almost definitely mean increased responsibility, if you have the capital to buy, it could also allow you more freedom and potential long-term financial benefits.

Image by John Allan [CC-BY-SA-2.0 (http://creativecommons.org/licenses/by-sa/2.0)], via Wikimedia Commons

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