Buying, rather than leasing a business premises is like buying a house – you'll need to do your property inspection, sign documents, organise finance and insure the premises.

You'll also need to make sure it's in the correct business zone, is a safe workplace and is built and modified with the correct planning and building permits.

Advantages

Some of the advantages of buying a premises rather than leasing one include:

• if the property becomes a major business asset, you can grow the business by borrowing against your equity
• enjoying the benefits of capital growth and security of tenure
• having no landlord – you control how the property is developed
• claiming depreciation of fixtures and fittings
• using the asset as part of your superannuation scheme

Disadvantages

With the freedom of owning the premises and not having a landlord, the disadvantages include:

• the premises fit-out and set-up costs are usually higher than leasing premises
• your ability to borrow money is subject to changes in interest rates
• not having a landlord means you take full responsibility for expenses, including rates and repairs
• banks usually want a personal guarantee which puts assets at risk, such as the family home
• if you have to relocate, selling the premises could be difficult

Check the planning and building permits, and zoning

When you're considering a property to buy, you should check the planning zones and overlays.

Learn more by reading our page on permits, zoning and approval.

What is a property certificate?

Property certificates provide really essential information. Buyers, sellers and developers use property certificates to verify things like:

• ownership
• land and building dimensions
• zoning
• heritage listing
• permits issued by the local council

You can order property certificates from the Victorian Government's Landata website.