How to Achieve Greater Returns on Your Business’s Property Investments
Everyone who buys a property does so with several goals in mind, one of which most likely is to make a profit when they sell it. This is true for buyers investing in a home, landlords in buy-to-let purchases and for businesses looking to invest in their own work premises. All too often, however, the projected profit when selling a property doesn’t materialize.
As a business owner, you may have taken steps to invest in your business premises with a strategy in place that includes selling it at a profit one day. What steps can you take to maximize the return on your investment (ROI) from your property?
Location, Location, Location
Location is critical to almost any business, so before you snap up a “bargain,” make sure it is the bargain you think it is.
For instance, the business premises in a certain part of town with a too-good-to-be-true price tag may not be in the best location for your business. Knowing it is in the “wrong” location, the estate agent has likely priced it to sell.
Should you be buying in town or on the high street? Would an out of town unit or retail park be better? Should you be buying a business property at all?
Consider Building Your Own
Designing and building property is not just for the domestic market. For many businesses, their needs are so specialized that the only real solution is to create their own business premises.
Even considering the price of land and the cost of building, the overall cost could still be less than if you bought an already built facility.
By building your own, you’ll be able to create your own specialized premises, whether you need your building to be part office and part laboratory or some other custom construction. You can also ensure that you will enjoy the benefits of the latest sustainable building method, leaving you with a well insulated, environmentally friendly building that is cheaper to heat and more comfortable, as well as fitting perfectly with the ethos of your business.
Then, too, you’ll have an opportunity to create a landmark, building if you wish. Your iconic, custom building would mark your business as unique, an ideal means of developing a thriving business—definitely a positive return on your investment.
Make Sympathetic Improvements
Improving your business premises is an obvious way of adding value and improving the ROI on your property.
However, doing so sympathetically and in keeping with the property is essential to improving the ROI on your property. For instance, you wouldn’t want to add an extension with a look that didn’t fit with your buildings age and style.
There are some changes that add more value than others, so consider all the options carefully:
- Insulation and energy efficiency. At the top of the list in the 21st century is making your business premises as energy efficient as possible. Wrap your building in cavity or thermal wall insulation, and opt for double glazed windows and doors.
- Your own power source. Utility bills are ever increasing, but business premises are notorious for wasting heat (and by default, money). How many offices have you been to that are stuffy and so hot that the windows stand open, even in winter? Insulation will help, as will investing in new heating technologies. Consider the gentler heat of underfloor heating and invest in solar panels and/or a wind turbine to generate some, if not all, of your own energy.
- In older buildings, you’ll likely need to do some restoration. You can maintain your building’s integrity, while still fulfilling your business’s working requirements.
Rent All or Part of It Out
Investing in a property is a bold move for any business. Just as with a domestic property, getting help to pay the bills is a shrewd move. This is why many business owners buy a property that they know is too big, section parts of it into smaller units and offer parts of it for rent to other local businesses.
Is this a move you could make? It means less of monthly outlay on your part and possibly a small profit to invest back into the property itself.
Buying or Renting?
This all assumes that buying your own business premises is the right move to make.
In many cases, it can be. It shows potential trade partners and your current client base that your business is trustworthy and stable, growing from strength to strength.
Invest wisely in the right property in the right location, improve it and maintain it, and you can expect a high level of return on your initial investment.