Are you starting your own business? Or wondering if you should simply buy a property rather than rent one? Well, whatever your case is, the answer is not simple. It varies according to you and your current position.
For example, if you don’t have budget constraints and already have an established business, you can go for buying an office space. On the other hand, if you have just put up a startup, buying a space is not an ideal option for you.
Still confused? If you are, then check out this article. We have discussed both pros and cons of renting or buying an office space.
Do you need help buying a property in Brisbane? Well, visit Brisbane office and connect to knowledgeable buyer agents working across the industry.
Begin By Asking Yourself These Questions
- How long will you stay in a neighborhood?
Do you have a majority of customers from a specific neighborhood or region? If yes, then you are likely to operate in this place for a long period. Buying a space here can be a decent option for you.
But if you think you might have to move out of the neighborhood soon and expand your business to other regions then go with leading the space.
- What is the current situation of your business?
The next question you should ask yourself is the current situation of your business. If your business has attained an equilibrium point and everything is going smoothly, then buying a space is a perfect choice for you.
On the other hand, if you have just put up a start-up, go with leading space. Because in the nearby future as the business goes you are more likely to move out from one region to another.
- Consider your local economy
You should also consider the local economy before buying or renting a space.
If you think that buying space in a region is profitable for you in the long run, you can take it as an investment.
On the other hand, if you want to put up your office in a prestigious place, leasing a building in a good place is an option.
- What is your financial position?
You cannot ignore your financial position before buying or leasing an office space. If you are looking for an affordable option to establish your business, renting a business can be relatively cheaper for you.
But if you look in the long term, buying a space is more profitable for you. At the end of the payment, you are going to acquire assets. So, if the budget is not a constraint for you, you can buy a place.
Leasing An Office Space
Leasing is a good option for all small businesses and startups. It is an affordable, flexible and simple way to start.
Let us take a look at some pros and cons of renting a space.
Leasing a space allows you to set up an office in a prestigious location and make a sophisticated brand image without burning a hole in your pocket.
Low Financial Commitment
While renting office space you don’t have to pay any down payment. You will only have to pay a refundable deposit that is equal to monthly rent. Though sometimes some landlords might request you to spend 6 months’ rent at the same time, it will still be cheaper than buying an office.
Renting up space means fewer responsibilities for you. The landlord is generally responsible for repair and maintenance. You can save your time and use it in revenue-generating activities.
Frees Your Working Capital
Renting a space helps you to save money. It allows you to spend less on office space and more on other important operations to help your company develop and grow. It saves you bucks as you don’t have to spend time designing the office interior. You can immediately kick start your activities as you move in.
The landlord can increase the rent over the time period. And it can be disturbing for your budget.
The main disadvantage of renting a space is that at the end of your lease agreement, you are left with nothing. Even if you have spent thousands of dollars on a space you will not own it. You will have to move to a different location if the landlord wants you to.
Buying An Office Space
When you have your own office space you don’t have to worry about frequently moving. And you can install heavy equipment if required. You can also change the interior look of the place as per your demands and needs. You don’t have to worry about frequent rent increments and the landlord’s authority.
Additionally, by buying your own place, you are also eligible for tax deductions.
Buying an office space requires heavy upfront costs at the start. It might look daring for you initially, but it is more cost-effective in the long term. At the end of your monthly payment, you will have an asset. It is an investment that can add value and security to your business.
Buying a space makes you eligible for tax deductions.
Owning space means that you are the owner of a place. It means you don’t have to abide by the rules of someone and can modify the building as per your choice.
Additional Source of Income
Buying a space adds an additional source of income. Even if in the future you have to move out of the office space you can either lease it or sell it at a profitable price.
Huge Financial Commitment
Phone buying a place you have to pay a heavy down payment. It is not suitable for you if you are just opening your business.
Buying office space can restrict your growth. You cannot move as per your will as your business starts to grow. Even if you wish to sell the property you will have to look for an ideal buyer which is a time-consuming process.
Buying a space often comes with additional costs such as maintenance and insurance costs. When you are the owner of a building you have to spend dollars on repairing the space so that it stays good. You might also have to buy property insurance.
There is no rigid answer to this question. Whether you are buying or renting a space, you need to consider your current position.
If you have any questions or tips to share with others you can come down in the comment section below.