Business Budget How to choose a property that fits in your pocket (2017 Update)
At the time of undertaking, countless are the variables that need to be considered and among them is the choice of the building where the company will work. One must think about the infrastructure offered by the neighborhood, close to its target audience, the types of corporations that operate locally and, of course, the business budget.
A pervasive question for future entrepreneurs is between renting or buying a property, and this decision should be made very carefully, evaluating how much of your business budget you can commit each month – and for how long. If you are not sure if your organization will work at the same address for a long time, for example, it is better to rent than to buy. On the other hand, the purchase of a commercial property can mean advantages for the manager, such as the possible sale of the property in case of emergency or reduction of the monthly charges when paying off the debt.
Want other tips for choosing your commercial property? Keep reading!
Make adequate financial planning
Before you visit the real estate, it is essential that you do proper financial planning, saving enough money that will allow you to pay the installment of the financing or the consortium quietly. In general, it is recommended that you have at least 20% of the total value of the property before the purchase – as this is usually the minimum amount required for the entries in real estate financing.
Also, try to save about 30% of your business budget monthly before closing the purchase of the property. That way, you can analyze if you can afford to install without compromising your corporation. Remember that the more money you have to pay off the final value of the property, the less you will have to pay with interest from financing or consortium.
Consider all the costs of acquiring a property
A widespread mistake when setting the business budget for the purchase of the asset is to think only of the income and the installments, forgetting to include in this calculation all the other amounts that you will have to pay. Therefore, reserve an amount to pay for deed, registration, taxes, tariffs, possible reforms in the property and the decoration. In general, costs with only the bureaucratic part can reach up to ~5% of the value of the property, so it is good to prepare.
Decide whether it is best to fund or join a consortium
Depending on your business budget, there are some possibilities in buying the commercial property, such as the financing or the consortium. Although little known to many entrepreneurs, the real estate consortium has grown in the preference of Brazilians, allowing you to choose, among several types of plans, the one that best fits your financial reality and also that you fully share the value of the property. It is crucial to analyze the monthly amount to be paid and compare with those of the financing, understanding which is the best in the long term – since your business budget may vary over the years.
Regarding financing, there are two most used tables, the SAC system and Price
- In the former, the initial installments paid are higher and, over time, these benefits are being reduced because the amortization is fixed and the interest is on the debt.
- Already in the Price system, the amortization is not constant, but the installment is. This means that you will pay the same installment value from start to finish, but in general, you pay more interest than in SAC.
Finding which one is best will depend a lot on your financial condition. If you have a larger budget in the early years, the SAC table may be more attractive; otherwise, Price may have more advantages.
Analyze the possibility of changing the business budget
When it comes to committing a significant portion of the corporate budget. It is important to remember that acquiring property through a financing or consortium can take years. That is, you will have to bear the value of installments over an extended period. And it is essential that you can project what your financial reality will look like in the coming years.
If your business is still starting, it is better to think about renting a property. Because since the costs involved will be lower and you will not commit to a long-term payment. Already for those more established businesses, it is necessary to try to understand the possible market fluctuations. As these are factors that put at risk the maintenance of your company.
Choose the property appropriately
A commercial property needs to have a privileged location. Which helps to value it and also to appreciate the business itself. For those who will commit to a long-term payment. It is very important to think whether the neighborhood in question has ways to grow positively or not. Therefore, analyze all the points that may influence the value of your property, such as:
- Infrastructure offered
- Proximity to important and outstanding points of the city
- Access Ways
- Commerce and nearby businesses
- Standard of houses and other buildings already built
- Cost of living in the neighborhood in question
- Possibility of growth
- Levels of violence
Before you decide, visit various properties and see if the neighborhood matches the type of business you want to open. With the characteristics and values of your business. The audience you want to attract, and the infrastructure you need to work. If you are not going to buy a new property, remember to carry out a complete survey. Avoiding buying a property with various structural problems that may be masked in your visit.
For those who do not have a significant amount to invest at the time of purchase, it may be more advantageous to buy a property at the plant. For example, allowing you more time to plan the payment. Also, do not forget to check if the footage and the internal layout of the chosen property. Make sure it matches what you need to make your business work. In some cases, it may be necessary to adapt the property to the requirements of health surveillance. Or perhaps any other bodies, and it is important to check whether this possibility exists.
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