Business premises owned vs leased

[AndyC_123]

Hi

This might sound naive but I’m a bit of a business noob so please bare with me...

Are the majority of business premises (yards/offices etc) rented rather than leased?

We have outgrown current site and have planning permission in for a larger one, but it doesn’t look too promising in getting passed.

There’s basically nothing for sale that’s suitable, but some that can be rented that would work. Always wanted to own stuff rather than lease, should my mentality change?

Renting is money down the pan so to speak, but do local authorities only want businesses on the sites they allow and nowhere else? It doesn’t seem possible to buy on these sites, only rent from the “big players”?

Current yard and office (portacabin) is rented but very cheap off a friend.

[bogie]

Nothing wrong with renting short term, but all the small business owners I now prefer to own their building if possible. Its tax efficient to hold it in your SIPP pension and effectively buy it with tax free money, investing for your future.

[anonymous-user]

I would be inclined to wait. My gut feeling is that commercial property is only going to go down in value for the foreseeable. Partly due to covid but also down to the bubble that has been created by the SIPP rules on pension investments that has been building up for years. Or if you need to crack on now perhaps an approach to the ‘to let’ premises with an offer to buy instead, or a much reduced rent?

[Chrisgr31]

Obviously nothing wrong with renting per se as lots do it, however in the long term it’s cheaper to buy and you still have the property. This of course ignores the cost of money etc.

Buying land is particularly challenging because generally speaking people buy land in order to develop it. So they will pay development value for it, and then of course develop it. This in turn means cleared freehold site with planning consent are rare.

If I wanted a yard with limited land I would look at buying a farm, renting out the fields and keeping the farm yard. However planners might not be so keen! Plenty of farms having outbuildings developed in to little industrial units though so could be a longer project.

No idea how expensive farms are though but if there is a perceived development value to any part they won’t be cheap.

[surveyor]

Buying commercial property tends to be more difficult, lenders want bigger deposits and a lot of businesses prefer to put that money into growing the business, when it will outgrow the premises etc.

Yards are particularly difficult, and actually where I would be tempted to buy as they can be hard to find, and often owners are only sat on them until they are ripe for development...