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Four essential questions to consider before buying a commercial property

Investing in a commercial property is a significant decision that requires careful consideration and strategic planning.

Whether you are looking to expand your business or make a strategic investment, it is crucial to ask yourself the right questions before purchasing.

We have collated four essential questions to consider when purchasing a commercial property that will help guide your decision-making process.

Is the property located in a desirable area?

When purchasing a commercial property, one of the primary considerations is its location.

It is important to evaluate aspects such as the accessibility for your employees and potential clients, your target market and the area’s overall economic health.

When selecting a location for purchasing a commercial property, it is also critical to undertake thorough due diligence and assess potential risks.

This involves examining market trends, the competitive landscape, planning permissions and adherence to local regulations.

Consulting with a commercial property solicitor is highly advisable during this process. Their expertise in navigating legal structures and regulations can provide invaluable guidance, ensuring that your property choice is legally compliant.

A strategically chosen location can significantly boost customer footfall, attract high-calibre employees and ultimately, contribute positively to your business’s bottom line.

Can you afford the purchase price and associated costs?

Beyond the initial purchase price, there are numerous other costs associated with buying commercial property.

Securing sufficient capital is crucial to ensure these expenditures do not overburden your business’s financial stability.

This includes funding for the deposit along with various transaction expenses like legal fees, property surveys and Stamp Duty Land Tax, which collectively can significantly affect overall affordability.

Thoroughly evaluating whether your business’s income can reliably cover these expenditures is crucial.

Additionally, you should consider the ongoing costs associated with owning commercial property, such as maintenance, insurance and any necessary renovations or repairs.

What are your short-term and long-term goals?

Determining your immediate and future objectives will clarify the type of property that best suits your needs.

Short-term investors might prioritise properties that can quickly increase in value while long-term planners might look for spaces that can adapt to evolving business models and growth.

If you are planning to develop your commercial property in the future, a commercial property solicitor will be indispensable for aligning your investment with your business goals.

They provide vital legal support in obtaining planning permissions and addressing regulatory issues that affect commercial property projects.

Their expertise ensures that your strategies for acquisition and development are compliant and strategically sound.

Understanding your business goals will help you determine the suitability of the property and whether it offers the flexibility to adapt to your evolving business needs.

How long are you planning on staying in the property?

Your anticipated duration of occupancy should directly influence your purchasing decision.

If your business model calls for flexibility or you anticipate significant growth, short-term solutions or leasing options might be more suitable.

A commercial property solicitor is instrumental in advising on and drafting lease agreements, particularly if you envisage a short-term occupancy. They can negotiate flexible lease terms that align with your strategic needs.

Conversely, a long-term commitment to a location might justify the upfront costs of purchasing, especially if the property can grow in value or be adapted to various uses over time.

Seeking legal advice

When purchasing a commercial property, it is wise to seek legal advice to navigate the complexities of the transaction.

A solicitor specialising in commercial property can provide invaluable assistance.

They will assist you with everything from conducting due diligence and negotiating terms of sale to ensuring compliance with regulations.

Expert legal advice not only safeguards your investment but also illuminates potential opportunities and pitfalls, ensuring that your property acquisition is a legally sound and strategic decision.

Do you need advice regarding a commercial property transaction? Get in touch with our team today.

Carl Jones

Director - Head of Commercial Department

I qualified as a Solicitor having completed my training with Mander Hadley in 1992 and am a member of the Law Society Property Section and The Warwickshire Law Society.