Buying, rather than leasing a business premises is like buying a house – you'll need to do your property inspection, sign documents, organise finance and insure the premises.
You'll also need to make sure it's in the correct business zone, is a safe workplace and is built and modified with the correct planning and building permits.
Some of the advantages of buying a premises rather than leasing one include:
- if the property becomes a major business asset, you can grow the business by borrowing against your equity
- enjoying the benefits of capital growth and security of tenure
- having no landlord – you control how the property is developed
- claiming depreciation of fixtures and fittings
- using the asset as part of your superannuation scheme.
With the freedom of owning the premises and not having a landlord, the disadvantages include:
- the premises fit-out and set-up costs are usually higher than leasing premises
- your ability to borrow money is subject to changes in interest rates
- not having a landlord means you take full responsibility for expenses, including rates and repairs
- banks usually want a personal guarantee which puts assets at risk, such as the family home
- if you have to relocate, selling the premises could be difficult.
Check the planning and building permits, and zoning
When you're considering a property to buy, you should check the planning zones and overlays.
Learn more by reading our page on permits, zoning and approval.
What is a property certificate?
Property certificates provide really essential information. Buyers, sellers and developers use property certificates to verify things like:
- land and building dimensions
- heritage listing
- permits issued by the local council.