As a small or medium business you will likely need to sign a commercial lease at some point and potentially purchase commercial for your day to day operations at some point. It’s a significant investment that can make or mar your financial stability, and it’s a complex process that can make insider pros scratch their heads in confusion now and then. You should have a clear understanding of how it can impact your bottom line and have a healthy return on your investment.
More importantly, buying a commercial property takes more legal responsibility, so don’t think it is comparable to purchasing a house. Here are some factors to consider:
Factor #1: Choosing Between Freehold or Leasehold
Freehold means that the owner will have full control of the land and property, making it the best choice for landlords. Meanwhile, other forms of businesses can benefit from leaseholds, which is based on a contract between you and the freeholder. This means that you will own part of the property for an agreed period of time, but not the land itself.
Factor #2: Choosing Between Cash or Loan
Many entrepreneurs, business owners, and would-be landlords strive to buy commercial properties using cash only since fewer complications occur. However, most rely on a loan provider.
Factor #3: Consider the Name to Put on the Contract
Buying or selling a property involves signing contracts, which will impact the property’s taxation and superannuation. With that in mind, be sure to consult with your lawyer regarding the best name to use when buying the property – be it your name, the company name, a trust, or more.
Factor #4: Consider the Time for Finance Approval
Obtaining finance requires approval, but the process can be time-consuming. You can meet deadlines and have the finance clause approved within a specific date by informing your bank early on establishing a liaison without the risk of terminating your contract due to late approvals.
The Bottom Line: Investing in a Commercial Property For Your Business
Many established businesses choose to rent a commercial property as it doesn’t demand as much commitment than buying space for a restaurant, retail store, or office. Purchasing a property is a significant milestone in your business, but it’s also a leap of faith.
It requires careful planning so your investment can break even with a significant return, though keep in mind that nothing is ever a guarantee. Before signing any contracts and making one of the biggest purchases in your life, it’s best to consult with a professional lawyer to help you understand what makes a good purchase.
How Can We Help?
If you are looking for commercial contract lawyers in Brisbane, contact our team at GLG Legal today! We can help you navigate through the legal complexities of real estate investing for your business, so get in touch with us today and see what we can do to simplify the process.