Would you like to have more control over your office space or build up equity instead of paying rent? Buying a commercial property comes with many advantages.
On the one hand, nobody will tell you what you can or can't do with the space. Do you want to remodel the interior, change the walls' colour, build corporation-like cubicles, or turn everything into one ample open space? You're free to do it.
On the other hand, buying a new office is an investment. Should things go awry with your business, you can always rent out the space or sell it to get fast access to liquidity. Not to mention that once you've paid the mortgage, you could even use the property to get access to loans or investment funds.
Buying the perfect office takes careful consideration, though. Here are nine of the most important things to think about before settling on a property and signing a commercial mortgage agreement.
1. Office Size and Layout
Commercial properties tend to be expensive, but it is essential to ensure your new office is big enough for your team. How large the office should be depends on how many employees you have and the office layout you want to create.
Are you planning to give each employee a cubicle or private office? Account for at least 250 square feet of office space per employee.
If you want a modern office for your small IT company, one with lots of co-working spaces and few or no private offices, you'll need at least 80 square feet of space for each team member.
2. Move-In Ready Vs. Fixer Upper
Another challenging decision regards the move-in ready and fixer upper buying options. As you'd expect, a fixer upper office is cheaper upfront and allows you to design and decorate the interior from scratch.
However, this solution often proves to be more expensive in the long run. On average, business owners who buy a fixer upper spend about £25,000 more than move-in ready property buyers when the renovations and furnishings are accounted in.
Buying a move-in ready office might mean the layout or décor isn't exactly how you like it, but you'll be able to move your business into the new office space immediately and don't have to spend more money in a rush to equip or furnish the space.
3. How Big is the Leisure Space?
Any tech company that respects itself must come with a leisure space. Typically, this is a separate room where you can fit at least a midsize ping pong table, some board games, and even an Xbox or two.
If the office isn't big enough to set up a gaming room, at least reserve a corner for some games and a beer keg for your team.
4. Building and Neighbourhood
When searching for the perfect office, remember, if a property price seems too good to be true, it probably is. Two factors that drive costs down are the building and the neighbourhood.
An office located in the heart of the city but that is less expensive than all other offices in the area is probably situated in an old, damaged, or otherwise altered building.
If you're looking for an office in the outskirts, check out the criminality levels and life quality in the neighbourhood where the office is located, or you might regret saving on your property purchase.
5. Transport Links
Do you know what can frustrate employees? Long commuting times followed by long walks from the bus stop or underground station to the actual workplace.
Good transport links, on the other hand, can keep your employees happy.
6. Parking
Besides transport links in the proximity of your premises, parking is another essential element of a good office. Perhaps you won't ride to work each morning, and maybe your employees won't use their cars either. But what about your customers?
Nobody likes parking a few blocks away from the place they're going, so make sure there is at least sufficient street parking near your new office.
7. Price and Commercial Mortgage Options
Once you've determined how big an office you need, consider prices and mortgage options. Commercial property prices can vary widely based on the city or area they're based in. For instance, an office in the heart of London City can cost ten times more than one located in an outer neighbourhood. However, make sure the office is still located in a good area if you want quick access to a commercial mortgage.
Speaking of which, don't settle on one mortgage solution and don't shop for the best mortgage yourself – unless you're a financial expert, that is.
Working with a finance broker when shopping for commercial mortgages or other financial products comes with multiple advantages. Indeed, brokers have more connections with banks and financial institutions and can access mortgages and financing options you wouldn't even know about. So, focus on doing what you do best and let the specialists find the right funding solution for buying a new commercial property.
8. Is it Scalable?
When buying an office for a new company, chances are you won't go for the biggest place in town. However, if your business skyrockets and you have to scale up to a bigger space, it's nice to know that you can find the extra space you need in the same building, maybe even on the same floor.
Otherwise, you'll either have to sell your office and buy a new one or rent it out and move elsewhere with your team.
9. Can You Cash It Out?
Buying commercial property is an investment, but it only is a wise one if you can sell the property for a profit, should you want to.
Many things can go wrong when running a company. For this reason, you should be able to use your new office to get fast access to cash if needed. Whether it's renting out the premises or selling it to get liquidity, make sure your new property can appeal to most business owners. Otherwise, you might not be able to cash it out.