Even though the immediate transition to hybrid paint has presented challenges, many small businesses still see strong interest in having a dedicated office or headquarters. In addition, some painters may find it useful, or even necessary, to have a fully available space to collaborate with their teams, organize painting workshops and corporate meetings, or carry out production or production activities.
However, advertising property, whether leased or owned, will have an effect on your small business’ cash flow, so making an informed decision about where to move will feature some points that are unique to your business.
READ: What to do when buying or renting your commercial premises
READ: Future-Proof Your Small and Medium Business by Investing in Commercial Real Estate
Kevan Govender, Regional Chief Investment Officer at Business Partners Limited, a financier specialising in small and medium-sized businesses (SMEs), explains that making the appropriate long-term maximum resolution to buy or lease advertising assets requires carefully weighing the pros and cons. of each of the options. Small business owners will also want to ask themselves several key questions about how they can assess the economic viability of their businesses by evaluating what would work best.
Buy or buy?
One of the main benefits of owning an advertising asset is that you will have free rein to the renovations and innovations you need to make to the assets. For businesses, ownership as a point of promotion, having the freedom to design the area to reflect the aesthetics of your company can be incredibly favorable from a brand perspective.
Also, assets from an advertisement can be a useful safety net in the unfortunate occasion that your business has to go out of business. Any time your business wants to scale back, components of the assets can be rented out as an opportunity for a higher source of revenue. Better yet, when the business owner retires, the proceeds from the sale of the assets can be used as a pension fund.
The main immediate problem of buying assets for your company is emerging interest rates. Given that South Africa experienced 10 consecutive interest rate increases in a period of just 3 years, it is very likely that the option of building long-term UPS. In this case, what you may need to pay the bond in the form of a monthly payment, at the beginning of the acquisition of the assets, can accumulate over time and put pressure on your cash flow.
READ: A consultant to secure real estate financing for entrepreneurs
The and dis to rent
If making a real estate investment in a very stressed economic climate is too big a commitment right now, business owners might need to rent space instead. One of the main benefits here is the ability to claim the actual amount per month as tax. -Deductible expense. In the case of public limited companies that own their own assets, the part of the capital of the amortization of their legal liability is not tax deductible.
However, a major drawback is that there is no net worth or investment in leasing advertising properties. Monthly rents will lead to complicated expenses, which will diminish your source of income and produce no return on investment when it comes time to move.
As Govender explains: “The pros and cons should be thought through conscientiously in the context of the current state of your business and the expansion plan you have explained as an entrepreneur. There is no one-size-fits-all solution. “Making the most productive resolution will involve reviewing some vital steps. »
Unique to consider
The first issue is whether the rental or ownership of an advertising asset will accrue the immediate charge of employing a committed space. In some cases, the refund due on a deposit may be less or slightly higher than the cost of renting the premises. In other cases, renting an asset could give business owners access to coveted prime locations that might not possibly be affordable as a purchase option.
Here, it is vital to determine if the location of the facilities is imperative to maximize revenue. In the case of retail stores, location can be a matter of determination that deserves not to be compromised. On the other hand, owning assets in prime locations, such as central business districts and cultural centers, can see the price of those assets particularly accumulate over time. This, in turn, can be noted as a successful investment that will generate positive returns and inject capital back into the business at that time. for sale.
Another facet is whether the duration and nature of the advertising assets you intend to hire or buy suit your expansion strategy. is more viable as a short-term solution.
READ: The ‘new normal’ of real estate after the Covid-19 pandemic
Govender says: “Whether you decide to rent or buy your business premises, at Business Partners Limited we have a solution for top entrepreneurs. Entrepreneurs who decide to acquire advertising assets will want to know how they will finance that acquisition. For those entrepreneurs, we will offer up to 110% of the required financing, allowing small businesses to retain the large initial investment they would possibly want for a deposit. Either option will involve anticipated and ongoing costs, which will be factored into the company’s money. Flow control plane.
READ: 7 mistakes when signing an advertising lease
In an article published in May, High Street Auctions director Greg Dart said it was very important for homeowners to invest wisely; Prioritize virtual systems that, in particular, work environments or offer long-term load benefits.
Dart, which has specialized in advertising real estate for more than a decade, has a short list of generation investments for landlords that will attract the right tenants and maximize rental income.
Councils:
Connectivity
“The most sensible thing on the list is the installation of a comfortable plug-and-play infrastructure for high-speed Internet access, which tenants demand from day one in the new premises.
“With each and every business now relying on video and cloud-based conferencing, the high-speed web is a competitive necessity.
“Providing fast and reliable connectivity in each and every area of construction is no longer an optional expense for homeowners and its absence will be reflected in vacuum rates. “
Energy
Dart says homeowners want two aspects: renewable energy and intelligent, intuitive systems.
“With Eskom’s current crisis, a big point of promotion is to offer renewable energy generation that helps keep offices operational and reduce the load.
“Renewable energy is also helping prices and carbon footprint, and attracting environmentally conscious tenants through selection or corporate policy.
“Solar panels, wind turbines and geothermal systems are examples of renewable force technologies that can be used to force advertising buildings and provide an uninterrupted power supply. “
Some smart and intuitive energy systems can also reduce costs for homeowners and renters, one of the most important being motion-activated lighting.
Safety
Dart says complex security systems are investments in high-crime countries like South Africa.
“They provide some asset security for landlords and tenants, which is especially vital for corporations dealing with sensitive data.
“Good investments for homeowners come with access systems, externally backed surveillance cameras, perimeter security, and intrusion detection systems. “
READ: Essential Protection Tips for Asset and Complex Owners to Watch Out For
Smart buildings
Dart says that while homeowners have covered the top 3 on the list, some other investment they deserve is smart building technology.
“Smart building systems can help homeowners manage their homes more efficiently and efficiently, reducing operating costs while the tenant experiments.
“For example, installing air conditioning systems can help homeowners reduce their energy costs, while giving tenants more workspace.
“Another facet is offering online portals for tenant management. Online portals allow tenants to pay rent, report maintenance issues, and communicate with the landlord or asset manager, all from the convenience of their computer or smartphone.
“This can save landlords time and resources, while satisfying tenants. “
Dart says that in the post-Covid market with consistently high vacuum rates, ad asset tenants have plenty of options.
“By making the right investments in generation, homeowners can future-proof their homes and stay ahead of the competition. These short-term expenses will largely translate into long-term gains. »
Do you want to receive directly in your inbox the latest news about real estate and the list of the most wanted assets?Subscribe to Property24’s Featured Properties, Lifestyle and Weekly Property Trends newsletters or to us on Twitter, Instagram or Facebook.
You have effectively registered your account!
A verification email is being sent to you. Follow the link in the email to complete the registration process. If this account is already registered, you will receive an email to reset your password.