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Is it better to buy commercial property outright, look for leasehold property or rent?

Buying the freehold of your own commercial property represents a significant capital investment. Many businesses will not have the financial resources to make this a realistic option.

Many businesses that do choose to buy commercial property outright do this as an investment. For example, you might buy a commercial property in order to develop it, or as an asset that you hope will increase in value over time.

A far more common choice is to lease your business premises. Leasehold property is available in most areas to suit most businesses, and often requires little or no initial capital investment.

A relatively short lease, or a lease that offers you the option to get out of the lease early, gives you flexibility if your needs and circumstances change. Conversely, you might prefer a longer lease if you will be spending money to adapt the business premises to your particular requirements, or expect to build a local reputation. In either case, you should be aware that taking on leasehold property usually means that you will be responsible for maintenance and repairs.

The easiest option, with the lowest initial costs, is to rent business premises that are available on a short-term licence. This sort of flexible arrangement allows you to occupy business premises without taking on a substantial longer-term commitment. Typically, both you and the landlord have the right to end the rental at a month’s notice. Serviced offices and small workshops are often offered with a flexible licence.

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