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Mortgage Loans Debt
Platinum Boarder |
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Business Mortgages - 2007/05/09 17:51
There are a number of distinct advantages for buying a commercial property. The likelihood is that the mortgage repayments will be similar to that of a rental payment on the same property. You aren't exposed to any hefty rent increases and the interest payments on a commercial mortgage are tax-deductible. You also have the potential to sub-let any free space that you might have, although, permission from your lender will almost certainly be required. Also the potential of the property’s value increasing is possible so your capital could well increase over time.
However, like any mortgage, there are always disadvantages to consider. The most obvious one being the substantial deposit you will need to ascertain for the property. If you chose to rent instead then this is money that could be used for far more important business purposes. Another problem is if you choose to relocate the business further down the line. Being the owner of the premises means you will need to sell the premises or finding a new tenant to take them over. It would be far easier if you were renting the premises as extracting yourself from a rental agreement is less time consuming. You will have the inconvenience of being responsible for such factors as maintenance, fixtures and fittings, decoration and security. Your capital will decrease in the event that the value of the property should fall.
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Loans
