Rent or buy

[Pilky]

We are looking to move into bigger premises, nothing too grand, 1500-2000 sqft.
We intend to install a mezzanine level (6-800 sqft)to accomodate our current production endevours, whislt then running 4-6 vehicles race/rally/trackday etc on the graund level with one 2 poster ramp etc.etc
Question is in the title, should we look at buying something outright (intrest only mortguage?) or renting in this finantial climate. A unit that is sutable(one of 6) has been built less than a mile from home and is currently available at £5.50 per sqft plus rates and site charges.
Any thoughts appreciated
Ian

[MKH9130]

5.50psfx is very good, depending on where you're from! I regularly offload units at circa 10psfx and above, although I'm in the south east!

If you can get it on pretty flexible lease terms (ie 3 to 5 years, or 5 years with a 3 year break) I'd go down that route, assuming your service charges are sensible.

The commercial market is looking a little wobbly at the moment, I wouldn't advise buying unless you're looking at a longer term investment.

[taffyracer]

£5.50 is a good price, I rent my warehouses out at £8, buy if you can afford it as rent is always wasted long term but if you need flexibility then £5.50/ft2 I would say is a steal

[Pilky]

Thanks for that guys. We are up on merseyside so I guess things are less expensive than darn sarf! There are some cheeper units but tend to be much older single height buildings. Ive tried looking for farm/rural places but without much luck.
The letting agent has said if we were to take a longer lease ie 5 instead of 3 years then there would be a few months rent free up front thrown in..and any building of structures inside may be taken into consideration also...
Ian

[Piglet]

I can't advise on the buy or rent but I deal with commercial property leases and most of what I see has a rent free period (typically around 3 months) on the front of it. I'd be pushing for something like that especially if you've got quite a lot of fit out work to do.

The comm prop market is quite quiet so I doubt that there are tenants queuing up for the units...

[MKH9130]

coyft said:

Rent. Get the shortest possible term and make sure there are no Director's guarantees.

I don't think I've ever done a lease for a smallish Ltd company without usually two directors guarantees! Best of luck!

[Davel]

For exactly the same reasons you may be able to buy an older unit, with a good eaves height and use that.

If you buy right and it doesn't work out, you can always sell it again.

If you do decide to rent, there are older units around, which should be cheaper.

[Maxf]

coyft said:

MKH9130 said:

coyft said:

Rent. Get the shortest possible term and make sure there are no Director's guarantees.

I don't think I've ever done a lease for a smallish Ltd company without usually two directors guarantees! Best of luck!

Perhaps you haven't been in a market where that landlord will have to pay rates on unlet property in the future and we are heading for a slowdown. I think commercial property is very high risk at the moment, now is the time to negotiate!

Damn right - they will be keen to fill any voids which up until April cost them nothing, but now cost them 46.2p for every £1 of rateable value!

[PhilLL]

Pilky said:

We are looking to move into bigger premises, nothing too grand, 1500-2000 sqft.
We intend to install a mezzanine level (6-800 sqft)to accomodate our current production endevours, whislt then running 4-6 vehicles race/rally/trackday etc on the graund level with one 2 poster ramp etc.etc
Question is in the title, should we look at buying something outright (intrest only mortguage?) or renting in this finantial climate. A unit that is sutable(one of 6) has been built less than a mile from home and is currently available at £5.50 per sqft plus rates and site charges.
Any thoughts appreciated
Ian

YHM