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Page 3 of 8
Buying Premises
2. Why Choose Not to Buy?
Before you go into property ownership, consider the possible disadvantages.
2.1 Can you afford to invest so much?
- Buying premises ties up cash that could be used to grow the company.
- If you are borrowing money to buy, interest rate increases could hit you hard.
2.2 Do you understand the commercial property market?
- By buying your premises, you make property ownership a core part of your business. You become exposed to an unpredictable market.
- If you buy at the wrong time, in the wrong area, or the wrong type of building, you may end up losing money.
- In a recession, it may be hard to let or sell your premises without a significant loss. But that may be the exact time when you are forced to sell.
2.3 Will you want to relocate, or change the size or layout of your premises?
- A good lease may allow you more flexibility to move elsewhere quickly.
2.4 Are you prepared to handle the extra work and expense that will be involved in maintaining your premises?
Labels: Premises
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