If you’re currently looking for new business offices, one of the key considerations you will have is whether to lease or buy the space. There are pros and cons associated with both, as you will discover in further detail below.
PROS OF RENTING / CONS OF BUYING
There are a number of pros associated with renting. This includes the fact that you will be able to take advantage of prime property, which you may not have otherwise been able to afford. This gives you the chance to rent in an area that has a professional image and a good location. This will boost your brand image allow you to free up working capital. This is because your money will not be tied up in the property, so you can respond to market opportunities that arise. You will also be able to move again with ease. If your company grows and your demands change, it is a lot easier to move into a new office space if you are only renting your current one.
One of the cons associated with buying is the fact that you will be responsible for all maintenance and any problems that arise. This can represent an added expense if you have large issues on your hands, such as foundation problems. For such issues, you will need to get in touch with a reliable company. If you find yourself in a bind, you can call Helitech, as an example, to get more information. If you rent an office space instead, this responsibility will fall on your landlord’s shoulders. As a tenant, you can enjoy peace of mind.
PROS OF BUYING / CONS OF RENTING
There are many cons associated with renting. One disadvantage is that there is no equity. You are simply funding someone else’s retirement with your lease payments and you will have nothing to show for your monthly payments. Many people would rather purchase their office space as this is an opportunity to make some extra money. You also don’t have to worry about the variable costs associated with leasing if you decide to buy. With leasing, you may be subject to higher costs and annual rent increases.
Aside from this, there are other benefits associated with buying office space. You may benefit from tax deductions due to owning and running a commercial space. These come in the form of property taxes and mortgage interest. Your business expenses will be more manageable and straightforward because you have clear, fixed costs. This means that unexpected financial expenses are less likely to pop up along the way.
As you can see, there are pros and cons associated with both options and it’s really all about determining the best solution for your business. When doing this, look at your long-term picture, as well as your current financial standing.