Sell first or buy first? Choosing the order for your business premises

If you own your business premises and you’ve outgrown them, you’ll face a question that sounds simple and isn’t: do you sell the old place first, or buy the new one first?

Home buyers argue about this endlessly. For a business, the stakes are different. Your premises aren’t just an asset; they’re where the work happens. Getting the order wrong can mean a double move, lost customers or months of carrying two properties. This guide sets out the trade-offs clearly, with some numbers, so you can make the call that suits your business.

What are you really choosing between?

At heart, it’s a choice between two kinds of risk.

• Sell first and you take on premises risk: the risk that you won’t find the right new site in time, and will have to rent temporary space or stay on as a tenant.
• Buy first and you take on timing and debt risk: the risk that the old premises take longer to sell, or sell for less, while you’re carrying both.

Neither risk is automatically bigger. It depends on your market, your equity and your business.

How do the two options compare?

	Sell first	Buy first
Budget certainty	High: you know what you have	Lower: depends on the future sale
Premises certainty	Lower: must find a site in time	High: the new site is secured
Carrying two properties	No	Yes, for a period
Finance needed	Usually just a purchase loan	Usually a bridging loan
Risk of a double move	Higher, if you need temporary space	Low
Pressure to sell	Low	Higher, as the bridge has a term
Main cost	Temporary premises, disruption, possible price rises	Finance costs during the overlap

When does selling first make sense?

• Suitable premises are plentiful in your area and property type.
• Your business can move easily, or could operate from temporary space.
• Your equity is tight, so carrying two properties would leave little headroom.
• Your market is softening, and you’d rather lock in your sale price now.
• You could sell and lease back, staying in place as a tenant until the new site is ready.

The last option is worth a closer look. A sale-and-leaseback gives you the certainty of selling first without the disruption of moving out, provided a buyer wants an investment property with you as the tenant.

When does buying first make sense?

• Suitable premises are scarce, and the one you’ve found may not come up again.
• Your business can’t easily move twice: heavy machinery, a commercial kitchen, a medical fit-out, licensed premises.
• You have solid equity across both properties.
• Your current premises are readily saleable, with a realistic price and good buyer demand.
• The new site needs work before you can move in, so owning it early lets fit-out start.

Buying first usually means a bridging loan secured over both properties. Our page on buying before you sell explains how that works, and you can ask a specialist whether buying first is realistic for you with a short enquiry.

What do the numbers look like?

Here’s an illustrative example of an engineering workshop worth $1.4m with a $300k loan, upgrading to a $2.1m site with about $130k of purchase costs. The owners have $150k of cash.

Buy first

• Peak debt: $300k + $2.1m + $130k − $150k = $2.38m, against combined value of $3.5m (about 68%).
• If the workshop sells for $1.4m with $45k of selling costs, net proceeds are $1.355m.
• End debt: $2.38m − $1.355m = $1.025m on the new site (about 49% of its value).
• Plus finance costs for however long the overlap lasts.

Sell first

• Sale proceeds of $1.355m repay the $300k loan, leaving about $1.055m, plus $150k cash.
• Purchase debt on the new site: $2.1m + $130k − $1.205m = about $1.025m.
• No bridge, but possibly temporary premises or a leaseback, and the risk of not securing the site.

The end debt is broadly the same. What differs is the path: buying first adds a period of higher debt and finance costs; selling first adds premises risk. Put your own figures into the bridging calculator to see your version, and read peak debt and end debt for how to read the results. (All figures illustrative.)

Are there middle-ground options?

Yes, and they’re often overlooked:

1. Long settlement on the purchase. Ask the vendor for a longer settlement period to give you time to sell. It may cost something in price or terms, but it can remove the need for a bridge.
2. Deposit bridge only. If you can line up the settlements but need the deposit now, a short deposit bridge may be all you need.
3. Sale-and-leaseback. Sell first, stay put as a tenant, then move when ready.
4. List the old premises before you buy. You don’t have to sell first to start selling first. Having a campaign under way or a contract in place makes buying first far safer. See how lenders view a sale exit.
5. Conditional contracts. In some cases a purchase can be made subject to the sale of your premises, though vendors in strong markets may not accept it.

What about tax on the sale?

Selling business premises can trigger GST and capital gains tax, and the order in which you sell and buy can affect timing. The ATO’s guidance on selling commercial premises covers GST, the margin scheme and the going concern exemption. If your premises are an active asset of your business, the small business CGT concessions, including the rollover, may help. Talk to your accountant before you commit, because tax affects your net proceeds and therefore your end debt.

A simple way to decide

Answer these five questions honestly:

1. How hard would it be to find another site as good as this one?
2. How disruptive would a temporary move be to customers and staff?
3. How much equity will remain if I own both properties at once?
4. How confident am I in the sale price and timing of my current premises?
5. Would a long settlement, a leaseback or a deposit bridge solve most of the problem?

If questions 1 and 2 point strongly to “very”, buying first is usually worth the finance cost. If questions 3 and 4 make you uneasy, selling first, or one of the middle options, may be wiser. Our moving premises checklist helps with the practical side once you’ve decided.

What do lenders look for if you buy first?

If you decide to buy first, the finance conversation centres on your exit: the sale of the current premises. Lenders generally want:

• Evidence of value for the current premises, such as an agent’s appraisal or valuation.
• The status of the sale: listed, under offer or exchanged.
• Peak debt with headroom against the combined value of both properties.
• An end debt the business can service once the old premises have sold.
• A term that covers a slow sale, with a plan B if the sale takes longer.

Owners who arrive with those five things usually find the conversation straightforward.

Whichever order you choose, plan both ends

The best relocations start with a clear view of both properties, both settlements and the debt in between. If buying first is on the table, tell us about it. The enquiry takes about 60 seconds, there’s no credit check when you first enquire, and your information stays with one team rather than being sent out to a crowd of lenders. A real person calls you to work through the numbers.

Please enter both property values, existing loans and your cash contribution as accurately as you can. It’s what lets us tell you, on the first call, whether buying first really works.

See if buying first could work for you →