It often makes good financial sense to buy rather than rent a property as ownership gives the business more control over their premises and avoid additional management fees and rent increases. However, general upkeep and maintenance is a variable cost for which the business owners should consider as they will be liable for these additional expenses as landlord.
In most cases property values increases over time so there is a financial benefit in addition to the saving on rental expenditure. Although ownership is a long-term commitment it can also provide an option to rent part or all of the premises in the future to generate additional income. Although this may require lender approval and amendments to the original terms and conditions of the commercial mortgage agreement or conversion to a ‘Buy to Let’ mortgage, ownership can provide additional business opportunities and options to a landlord or owner.