Purchasing a commercial property can be a great alternative to leasing for many businesses; it offers more freedom and flexibility, is key for business growth and future investments – and a retail unit is no different. However, buying a property can require a significant investment in both time and money so choosing the best option the first time is important.
Whether this is a first property or one in a chain, there are key things to look for and consider before jumping in. Here’s our guide on the top things to think about when purchasing a retail property.
Choosing the right location for your business is extremely important when purchasing a retail property. Think logically about the use of the retail unit, local competition, accessibility, transport links and if it’s a growing area. Each business type will be looking for different things such as a convenience store will want to look for a central location, near housing and other shops while not being too close to a larger supermarket. On the other hand, a clothes shop will want to be located near other clothes shops to benefit from the higher footfall of competitors.
To find the best location suited to your business, research and consider the following:
Another consideration for any retail property purchase is the flexibility the unit offers. Will the space be able to adapt and change as the business grows or as the market trends change? Ensuring the property is able to adjust to the needs of your business is key to successful long-term investment and operations. For example, due to COVID-19, many retail outlets diversified and created an online sales platform to accommodate their customer’s shopping habits during this time which going forward complements their physical retail units.
In order to give your business the greatest flexibility, research the area’s recent property developments and read through the deeds. The idea of being flexible only works if the property and area allow you to be so.
Before making any decisions on purchasing your new retail property, remember to consider the financial side and budget for it. It’s a big investment to make and there are a number of costs to factor in, including:
Once the costs have been established, remember to calculate your ROI and look at your financing choices. There is a range of options available for finding the best financing option for you and your business.
It’s critical to get a full professional survey carried out on the potential retail property before purchasing it. Similar to when buying a residential property, a survey is there to ensure all parties are informed of any issues and can make an informed decision on the condition of the building to ensure they are not liable for costly repairs in the future. Although there are different levels of surveys, it’s worth considering a full survey to ensure a complete check of the property is undertaken due to the size of the investment.
It’s so easy to think with your heart and not your head, but when buying property, your head should definitely lead the way. Purchasing a retail unit is a big investment so remember to be rational, don’t jump into buying such property without doing your research and considering all the options available. For example, for many businesses, renting is seen as the safer option because buying initially exceeds the cost of rent, but in the long term, buying gives the business flexibility and the independence it might need. This is especially true for established businesses that already have steady incomes but for start-ups, a cautious approach is recommended.
If you’re looking to purchase a new retail unit or sell your existing one, get in touch and our expert team can provide advice and help you through the journey!
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