Whether you’re intending to run your own business from the property, or rent it out to another firm, buying commercial property (such as a shop, warehouse or offices) can be a great investment, but it doesn’t come without its risks.
Buying and investing in commercial property is a minefield, particularly for a first-time business property buyer. Here, Katie Hall, a solicitor at WHN Solicitors, who specialises in commercial property transactions, offers guidance to assist purchasers embarking on the process.
A starting point
Much like buying a house, the first step when buying a commercial property is to find something suitable, agree a price with the seller and secure funding. You may wish to seek guidance from an accountant for advice about the best way to fund the purchase.
Once a price has been agreed with the seller, you will need to instruct a solicitor, like Katie, to act on your behalf.
Advantages to buying commercial property
Owning freehold commercial property allows the owner to retain control of the property, meaning you’re free to do what you wish to the building, without having to seek consent from a landlord. You’ll also be in control of the building insurance and will have no service charge to pay.
Furthermore, unlike residential property, commercial property does not attract higher stamp duty rates on the purchase of an additional property. Also, competitive mortgage rates mean you may be able to secure mortgage repayments that are lower than payments to rent the property.
Cash flow forecasting
Do keep in mind that buying commercial property is likely to tie up capital. So, if you run a business, it is important to consider whether tying up capital in a commercial property is in the interests of the business, or whether the capital would be better spent elsewhere.
If it is your intention to run a business from the property, the business requirements for size and location of property may change as the business grows, meaning considerations should be given to how the property would coincide with business plans in the future, were they to alter course.
Katie Hall is a solicitor based at WHN’s Blackburn office. Katie specialises in commercial property transactions and advises clients on all aspects of commercial property law, including property acquisition and sales, re-mortgages, and lease arrangements for commercial buildings.
Katie has vast experience acting on behalf of individuals, companies, partnerships and pension funds in the purchase of commercial property, and can guide you through the whole legal process. To contact Katie, call her on 01254 272640 or email katie.hall@whnsolicitors.co.uk
