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PPG_Blog_May_article 7_investing in commercial property

As a business owner, it can often be more cost-effective to purchase a commercial property rather than leasing one.

Advantages

  • Buying commercial premises will provide you with increased security and freedom for conducting your business.
  • Real estate is a good investment during times of inflation or low interest rates.
  • Mortgage repayments may not be much higher than rent payments for a lease.
  • Any improvements to the premises add value to your investment.

Disadvantages

  • Owning business premises generally ties up capital which may be better invested elsewhere in the business.
  • You cannot easily relocate your business if your business out-grows its premises, the market turns, or the area changes.
  • If you are starting a business, the level of income a business generates can vary and you don’t know just how successful you will be.
  • Long-term loan repayments for premises can put pressure on small businesses.

Carefully consider your options and ensure you obtain property, financial, legal, and business advice before making any commitments to buy commercial premises.

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