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7-Step Guide To Getting Your Business Premises
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Office space rental and cost is increasing. Here is a simple guide to getting the most suitable premises for your business.. |
1. Understand The Real Estate Market
- The real estate property market usually lags behind general economic trends.
- As a result, prices can be relatively high even when the economy is facing a downturn. As a buyer, it is important for you to be well-informed about property market trends.
2. Decide On A Type Of Property
Choosing a suitable type of property will depend on your specific business needs. When deciding on a property, you may want to consider the following:
- Type Of Business Activity
This affects the choice of property suitable for your business activities. Industrial properties mostly include manufacturing spaces while commercial properties include office and retail spaces.
- Location
This depends on your need for proximity to your customers, suppliers, central business district, and so on.
- Relevant Codes And Regulations
This may affect building plans.
- Budget
This determines the property that you can afford.
- Buy or Rent
This depends on the way you want to structure your asset portfolio, your budget and most importantly, your business plan and strategy.
- Terms and conditions relating to purchase/rent
3. Get Professional Advice
- The easiest way to find out more about a property is to enlist the help of an agent, consultant or developer.
- They can provide information on available properties in the market, advise you on market prices as well as assist you in the procedures for obtaining a property.
4. Carry Out Due Diligence
- Before taking any action, you need to carry out due diligence as the real estate market operates under the principle of caveat emptor (i.e. buyers beware)!
- Some of the things to look out for include:
- ensure the seller's title is complete and free of mortgages, easements, and so on
- inspect the land for pollution
- check Government development plans for possible redevelopment, road widening, etc.
5. Close The Deal
- A lawyer will be able to assist you in conveyancing matters such as drawing up the proper terms and conditions, and ensuring proper deed transfer.
- You may also have to register your deed with the Strata Title Board.
6. Obtain Financing
- If you are buying a property, you will need to pay in full upon closing the deal. You have a few financing options:
- take up a mortgage
- approach property agents and developers for assistance
- depending on the nature of your business, you may qualify for Government assistance
- If you are taking a loan for your property purchase, the maximum loan amount for property purchase is 80% of the property's purchase price or its valuation, whichever is lower.
- The loan period can be up to 20 years if the remaining lease is 30 years or more.
- Sometimes, a combination of term loan and overdraft facilities is offered to suit the company's needs.
- Alternatively, consider renting your business premises - this requires considerably lower capital investment
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