The world of real estate (whether you’re looking at industrial premises or residential properties) is a bit of a minefield. With so much money at stake, a mistake can be very costly, and neglecting to have a structural survey can be devastating.
If you’re looking to invest, it’s about buying smart. Just like you would with shares, you want to buy low, make some simple, cost effective improvements, and increase the value to sell on. This should all be done quickly in order to maximise on profits, and it’s all about simple, cheap alterations which up the value by substantially more than you’ve put into it.
When you’re looking for a new office building or a warehouse, this won’t be a case of a quick turnaround. You’ll be looking for something which will suit you for a longer period, because shopping around and moving premises regularly can cut into your businesses profit margins, and disturb working patterns. You might have a few weeks without offices, or you might need to pay for two different properties while you get the new industrial premises up to scratch.
How are you funding this decision? Buying industrial premises and renting are very different options. If your company has more or less plateaued in terms of size, then buying will probably be the most cost effective solution. Make sure you have room for at least a few extra desks so if you do need to take on additional staff you won’t need to sell up and start again. Property tends to be priced per square footage (at least as a guide), so if you choose a particularly large building which you don’t need at the moment then you’ll be spending money which you don’t need to be spending. One way around this is to sublet space to a smaller company on a rolling contract. This works well for both parties as it prevents the company who own the building having to pay for unused space, and it’s a flexible solution for small, rapidly expanding companies who don’t know what style office would suit them best or for those whose funds are somewhat limited.
Anyone who has every bought a house will know that the process can take a very long time. The same is true for those who are looking to invest in industrial premises. As a result, you can and should start looking long before you actually plan on buying.
Joseph works for Oaktree Partnership, a commercial lettings agency in Norfolk. While he isn’t working he enjoys blogging and writing articles on tips about choosing the perfect industrial premises.