If you need a commercial property it’s important to weigh up the pros and cons of both renting and buying. It’s not quite as simple as buying or renting a house and there are other business concerns to consider.

What classes as a commercial property?

If you are trading within the building or using the property for any kind of business purpose, then it is a commercial property. Even if you live within the building (for example you buy aretail premises or pub with an owner’s flat above) it is still classed as a commercial property. Here are some of the most popular types of commercial property:

• Office
• Warehouse or factory
• Shops or retail units
• Pubs, bars and restaurants
• Hotels and B&Bs
• Farm buildings
• Nursing homes and private clinics

Buying VS Renting

If your business is expanding or you’re looking for your first office, you need to decide whether to buy or rent a property. Most small businesses start off renting a space until they establish their turnover and know what they can afford when applying for a commercial mortgage. Here are some advantages and disadvantages of renting:

Renting pros

• Minimum deposit required compared to a large cash sum
• Easier to relocate or upscale/downscale as needed
• No maintenance costs

Renting cons

• Your landlord could increase the rent, affecting cashflow
• You might not be able to adapt the property if needed
• You will never own the property as a business asset

Some businesses rent a premises as a stepping stone before buying a commercial property, while others simply prefer to rent long term. Many businesses only require a small office or studio, for example, which is easier to rent. However if you’re thinking of buying here are the pros and cons:

Buying pros

• You know your monthly payments – not dictated by landlord
• You own the building so can make whatever changes you like
• The property could increase in value

Buying cons

• You’ll need a large deposit
• You’ll be responsible for maintenance costs
• More difficult to relocate

If you’d like to find out more about commercial mortgages, get in touch with our commercial mortgage brokers.

The post Do I Need a Commercial Mortgage? appeared first on Genie Lending: Business Loan Alternative Finance Specialists.