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Robert Irving Burns

Buying Commercial Property Guide

There are many reasons why you may be thinking of buying commercial property.

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There are many reasons why you may be thinking of buying commercial property.

There are many reasons why you may be thinking of buying commercial property. Some businesses are looking to expand their current operations and need larger commercial premises. Or, you may be thinking about investing in property to rent commercial space to tenants. Whatever, the case, buying an office building, retail units, warehouses, or leisure facilities, can be a complicated business.

Our guide to buying commercial property will help you understand what to look for in finding and buying the ideal commercial premises for your needs. You will also learn how to avoid many mistakes that companies and investors make when purchasing property for commercial use, without the need for Landlords consent, which could be withheld.

Because many businesses are looking to buy commercial premises rather than rent, let’s look first at all the pros and cons of owning your own commercial property.

The advantages of buying commercial properties

There are many advantages to buying commercial property to operate your business from. For example, you are not affected by rental increases and this helps to plan your outgoings more accurately. You also have much more flexibility on how to design the internal layout of the building for your own use.

There are also more financial advantages to purchasing commercial property. Depending on the type of property, you may be able to sub-let a portion of it and, therefore, reduce your mortgage payments. Also, mortgage repayments may be similar to what it would cost to rent commercial property. In the end, if property values increase, you can benefit from capital appreciation.

The disadvantages of owning your own commercial property

However, buying commercial property doesn’t suit all businesses. For example, although your property can be a great asset, if the market value drops or interest rates increase, the property could become expensive to upkeep.

It is important to weigh up the pros and cons of buying a commercial property. However, if you have decided to purchase a commercial property, here is a guide to making sure that you buy the best property & take everything into account for your commercial needs.


Finding a property in a good location and one that will serve your needs is a must ensure that your investment pays off. However, much depends on the type of business that you operate or kind of tenants that you hope to attract.

For example, if you are looking to purchase retail premises, then you should choose a property that is served by good transport links and easy access. You should also think about the property’s proximity to suppliers and how easy it is for customers to find you. If the trade relies on footfall, it is important to know the future plans for the area. For example, if a new shopping centre is developed on the edge of town, an old fashioned high street which once attracted strong footfall, could suffer as a result of the new development.

However, many tech companies can benefit from lower-cost properties that are in remote locations. Even then, your employees should be able to get to work easily and have public transport as an option.

If your business is involved in producing goods or focusing on online retail, then easy access to large transport hubs will definitely be a determining factor on location.

Finance for buying commercial property

Most businesses and investors require a mortgage to finance the purchase of a commercial property. So, the first thing you should do is compare mortgage deals that banks and lenders are offering. Very often, you can find competitive fixed interest rates and get assistance in setting up financing.

Most lenders require that you put down a deposit ranging between 20-50%. To secure the mortgage, you will have to provide your business accounts and cash flow projections.

Usually, mortgages have a 3 to 25-year term, with the average being about 15 years. As with all mortgages, the property is at risk of repossession if you don’t keep up payments.

The final cost of purchasing a commercial property

The commercial premises become your property when the deposit is made and the contract is signed. However, you should be aware that there are usually extra costs to take into consideration. For example, some of these are:

  • Stamp duty and land tax in England, Wales, and Northern Ireland. In Scotland, this is called Land and Buildings Transaction Tax.
  • VAT has to be paid on some commercial properties.
  • Setting up your premises – setting up office and work space, decorating, and installing IT systems.

There are also monthly and yearly costs that you are now responsible for if you own commercial property. These are:

  • Business rates for commercial properties.
  • Buildings Insurance.
  • Costs associated with managing the property.

Owning commercial property

Buying a commercial property as an investment or as premises from where to operate your business as many advantages. The property can provide you with long-term security and can become a valuable asset to raise financing in the future is that is necessary. It is however important to plan how the property will suit if your business needs to expand or contract. For example, how easy would it be to rent out surplus space as and when required? In addition, if the business was sold, would the property be attractive to others to rent out as a whole?

C & J Thompson

“RIB have a wealth of detailed knowledge and experience which shines through their assessments and advice. They have never failed to find us quality tenants. They have negotiated good deals, whilst protecting our interests, and processed all the paperwork quickly, efficiently and with the minimum of fuss. We feel we are kept well informed throughout the lettings process.”

Lynette Chan

“RIB have been fantastic in letting and managing my flat. Th‎ey secured for me a very competitive rental income (higher than their competitors) and a tenant who is very professional and reliable. RIB have been excellent in working with both my tenant and my building management in resolving queries and issues. I would highly recommend RIB’s letting and management services.”


“I highly recommend RIB estate agents. The team’s local knowledge of the area is excellent and they worked hard to get multiple viewings through the door. When it came to getting an offer that I was satisfied with, Lee negotiated well in getting a good price that I was happy with. Lee also managed the sale really well through the exchange and completion process, giving me peace of mind that I was in good hands!”