Whether you decide lease or buy your office space, it’s a huge investment. To both buying and renting there are good and bad things to go along with them. However if you’re stuck on which route is best for you, here are some things to consider.
WHATS GOOD ABOUT LEASING
If you haven’t found the best property to buy or you simply aren’t ready to make a commitment, leasing has a few benefits.
When you’re renting space you don’t have to pay a down payment, this is great for anyone. However whenever you buy property you do have make a large down payment. Leasing only makes you pay monthly rent and normally a one-time fee if you go with a broker. If you decide to hire an attorney you will usually pay for two to four hours of their time. Leasing lets you to use any remaining cash.
With leasing commercial property, you have the ability to take away from your lease payments, as well as other expenses on your taxes.
Also with leasing the landlord is accountable for all repairs and maintenance. You’re most likely going to be in charge of keeping the carpets and inside space clean; however the landlord will be responsible for maintaining the building’s good condition. Make sure you go over your lease before and see who is responsible for what.
You can of course lease in a nicer area. It’s more cost-effective to lease in an expensive area, and gives you more access to high-end properties.
However, when you lease property On the other hand, when you lease your property, you don’t build and value. Also whenever you renew your lease, the rent is more than likely going to increase.
WHATS GOOD ABOUT BUYING
Although leasing may seem like a better deal right now, buying property can also give you some compensation.
When you purchase property you DO build up value over time, this is a major advantage. The equity you’ve built over time can help especially when it’s time to expand your business.
When you buy property how much you pay won’t change, the cost stays the same. Monthly payments will never increase.
You’re able to subtract interest payments from your taxes. However, different from leasing you can’t take away your entire monthly fee; although you can remove your mortgage interest.
When you buy space you also have the ability to rent it out. This means that with enough property, you’re able to rent out any extra space to get extra income.
However, a major downside of purchasing property is that you are required to pay a pretty hefty down payment. Depending on your business, with the cash you would use for a down payment could go towards other things to help your company grow.
While nobody can give you an answer on whether you should rent or buy, you can take this information into account. Make your decision based on your company, its finances, and its future.
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About the Author: Lalanii Wilson-Jones, MBA is a dynamic business leader based in Dallas, Texas who owns & operates multiple companies across several industries. Her range of talents and experience makes her an ideal candidate for strong economic partnerships all over the world, a great mentor and a great source of information that can change the mechanics of any sized company.
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