Home & Business vs Separate Commercial Property

[rjb7]

I have been operating a small mail-order company from my home for 10+ years and I'm now looking to either buy a new home with more space to expand the business, or to buy a separate commercial property. I always felt that working from home made good financial sense, but having considered these options further I'm now not so sure. I have found a suitable commercial property locally and I could afford to buy the freehold with a small mortgage and as it is larger than I need I would aim to rent half out to gain a rental income. Also, I would hope that the commercial property itself would be a good long-term investment and I believe this could be incorporated in a SIPP. I have no experience with commercial property so I was hoping to get some advice on the financial implications and pros and cons of these options.

Thanks,
Richard.

 

[Mr D]

Can you afford to do it if you don't end up renting out part to anyone for a few years?
With the economy the way it is and the way we expect it will be for a while, may be a glut of landlords looking for tenants.

 

[rjb7]

Thanks.. That's a good point, but yes I should be able to afford it without getting any rental income. I'm really weighing up what would be the best long-term investment between buying a commercial property or moving to a bigger residential property.

 

[Socio South West]

Its one of those questions to which the answer has to be personal to your circumstances

A home based business is easily closed down at any time with minimal commitments... but you have it under your feet 24/7 and not always ideal, especially in a family situation.

The separate premises ups the costs of running the business considerably, and even though you would probably let part, is the business strong enough to sustain the increased commitment, or can it grow to increase the income ?

Your increased commitments after your legal and mortgage costs are something like... Insurance, maintenance, security, Business rates, Service charges and Waste disposal for starters

 

[Stas Lawicki]

Buy an old farm or small holding, covert a shed or two, rent one out if you like, retain one as your 'office' or workshop etc and maintain the separation from work and personal life whilst not undertaking a liability that might bite you back in the coming months /year.

No idea what your business is or where you are based but perhaps that's a good compromise?