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Running a business:
To own or lease

You should first consider whether property ownership could be wrong for your business. As examples, it may not be possible to buy property in your desired location, or you may prefer temporary accommodation whilst you decide on your preferred location or determine how much space you will need.

Many businesses would prefer to own premises. Property ownership gives greater freedom, freedom to decide how to use it, how much and when to spend on repairs, alterations and improvements, when to sell it and to whom. Your business may become identified with a particular property, which provides a particular incentive for you to own the property if you want to sell the business in the future. You are then free to negotiate with a buyer and avoid any complications that could be brought about by a third party landlord.

If you have very specific requirements for your property you might consider buying some land and building your own property from scratch. Be aware, though, that finding the site, obtaining planning permission and building can take a considerable amount of time. Do not under-estimate the amount of management time and cost, including the cost of lost opportunities.

If you found that you no longer need an owned property, you have various options. You could sell it, and possibly make a profit, or you could let it out yourself in the future, and receive an income stream. By contrast, if property is leased you might find it difficult to sublet, and when you vacate the property the landlord will probably require you to make good any 'dilapidations', which could involve a significant cost. You are also unlikely to get back the costs of any improvements you have funded.

Buying a building involves tying up a lot of capital, which could be used in your business. However you need to look carefully at rent versus loan repayments. Paying rent may be no cheaper than loan repayments for the same type of property � a landlord is, after all, looking for a healthy return on his investment. Both renting and buying will result in some uncertainty over the future cost - longer term leases include provision for rent reviews and loans usually have variable interest rates.

Whether you own or lease, you will need good advice from a property solicitor. We can recommend a solicitor, advise on the pros and cons of ownership and help you to find the finance on the best terms.