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, or 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. (See Getting out of a lease).

2.4 Are you prepared to handle the extra work and expense that will be involved in maintaining your premises?