Buying (rather than leasing) a business premises is like buying a house — you’ll need to do your property inspection, sign documents, organise finance and insure the premises etc. You’ll also need to make sure it’s in the correct business zone, is a safe workplace and is built and modified with the correct planning and building permits.
Advantages of buying a premises over leasing are if:
- the property will become a major business asset, and you can grow the business by borrowing against your equity in it
- you enjoy the benefits of capital growth and security of tenure
- you want no landlord so you control how the property is developed
- you want to claim depreciation of fixtures and fittings
- you want to use the asset as part of your superannuation scheme.
With the freedom of owning the premises and not having a landlord, the disadvantages are that:
- the premises fit out and set up costs are usually higher than leasing premises
- your ability to borrow money is subject to changes in interest rates
- no landlord means you take full responsibility for expenses including rates and repairs
- banks usually want a personal guarantee which puts assets at risk e.g. family home
- if you have to relocate, selling the premises could be difficult
Check the planning and building permits, and zoning. When you’re considering a property to buy you should check the planning zones and overlays. Learn more about how to do this by reading Permits, zoning and approval.
Where to get a property title
Property titles provide the really essential information. Buyers, sellers and developers use property certificates to verify things like:
- land and building dimensions,
- heritage listing,
- and permits issued by the local council.
You can order property titles from the SA government land titles office.