In today’s commercial world, there is plenty that businesses can’t control but owning your premises provides certainty of tenure, rent and gives your customers the benefit of a familiar face. 

We’ve all experienced those moments of confusion when we head to our favourite business – maybe a café, hair salon or hardware store, only to find they have unexpectedly moved on.

When this happens, time-poor consumers simply take their money elsewhere rather than hunt around trying to find their preferred outlet.

It’s just one example of the value of owning your premises. 

The value of premises can’t be overstated

For small to medium enterprises (SMEs) many aspects of business life cannot be controlled – from regular costs, to the economic climate and consumer sentiment.

However, one of the key factors that SMEs can, and should, take charge of is their location – and in particular, their premises.

Location often plays far more of a role in success than many people realise. 

It can impact multiple aspects of your business such as accessibility, atmosphere, market reach, and brand recognition. 

The location of your premises also impacts your ability to attract and retain great staff. And you want to be part of a local ecosystem of businesses that complement each other. 

Yet too often, SME owners hand the reins of control over their premises to a lessor (landlord). And the property owner’s long term plans may be very different from your own.

We saw an example of this in late 2022, when retailers, restaurants and cafes operating in Sydney’s Harbourside Shopping Centre were forced to shut their doors for good as the mall was closed permanently for demolition[1].  Some of the SMEs involved had been operating in the centre for decades, building tremendous goodwill and a loyal customer base.

An investment in its own right

The appeal of owning your SME’s premises goes beyond giving your enterprise certainty of location.

It also allows you to control the rent. 

Raine & Horne Commercial’s agents often see SME owners buy their premises through their self-managed super fund (SMSF). The SMSF charges rent, giving the owners/trustees total control over the rent they pay/receive.

At the same time, the SMSF has a valuable asset – the commercial property, which will allow the SME owners to enjoy a more rewarding retirement in the future.

Opportunities to diversify income

An additional plus of owning your premises is the potential to generate extra, passive income by subletting space.

The Raine & Horne Commercial team often sees this happening in buildings such as medical centres, where the doctor who owns the practice, sublets rooms to complementary service providers such as physiotherapists. 

It is an opportunity to broaden your income and protect cashflow during slower trading periods.

A way to trim expenses

In commercial leases, it is typically the tenant, not the owner, who pays for a variety of property-related costs such as repairs and maintenance. 

When the premises is part of a large-scale retail centre, the SME often holds very little power in the tenant/landlord relationship.  It’s common for the lease to contain clauses that commit the tenant to funding substantial refurbishments every few years – regardless of whether the SME is in a position to wear the cost. 

When you own your premises, you hold the reins of power, and can decide if, and when, the property will be given a refresh. 

Just as importantly, you call the shots around what that refurbishment will look like. 

Learn more – talk to a commercial property expert

Buying your business premises is a major step.     

It is important to understand the costs involved, the process, and the availability of suitable commercial properties in your area.

The best way to do this is to speak with your local Raine & Horne Commercial property experts. It could be the first step in regaining control of your business strategy.  

 
[1] https://www.smh.com.au/national/nsw/iconic-harbourside-shopping-centre-shuts-for-demolition-after-three-decades-20221209-p5c515.html