If you’re expanding your business and looking into commercial office space, you’ll eventually need to make a decision as to whether to buy space or rent it. The following are some important things to consider when making a decision between the two:
Benefits of renting
Worrying about basic upkeep, repairs, or maintenance for office space can cause a lot of extra stress. Just like with renting a home, this isn’t something you’ll need to be responsible for as a tenant. If you’re just starting out, the last thing you need to worry about is an expensive repair, especially with other business expenses you may be facing.
And because it can take a while for a new company to begin making money, it can be difficult to afford the purchase of commercial space. Renting doesn’t require nearly as much money upfront, and you can use the cash you’d need for a loan down payment towards other business ventures.
Speaking of new businesses: it can be difficult to predict how your company will progress as it expands. You may need to downsize your office space, or you may outgrow it quickly. You may even decide to pick up and move to a completely different city, and one that your business can thrive in. Either way, the space that you start off in initially might not last long at all, and you can be stuck with it for a while if you decided to purchase it. As a renter, however, you have the freedom of picking up and moving after your lease is up, if that’s what you wish.
Benefits of purchasing
It may require a little bit more money upfront, but in the end, monthly payments for a commercial space that you own can be much cheaper than comparable office space that you’d be renting. If you find the perfect place and the deal is great, taking advantage of it can help your business save a lot of money in the long run.
As with any rental property, that monthly rent goes nowhere and doesn’t allow you to build equity. But whether you buy a commercial space in cash or you take out a loan and start making payments, you’ve got equity. You have an asset and if absolutely needed, you can tap into that equity. Buying property is an investment, and you also have the choice of reselling it or leasing it out later on.
Do you have a unique vision for your office or commercial space? If you’re renting property, you’ll likely need to get any drastic renovations approved by the landlord. But when it’s your own space, you can remodel it as you see fit, so long as any renovations you want to do adhere to local regulations and you obtain any necessary permits.
Do you need extra cash to take care of small business expenses? If you’re receiving structured settlement or annuity payments, Peachtree Financial Solutions may be able to help get you the cash you need. By selling all or a portion of your future payments to Peachtree, you can receive your money sooner and in one lump sum. Contact Peachtree Financial Solutions today to learn more and to receive your free quote.
Nothing above is meant to provide financial, tax, or legal advice. You should meet with appropriate professionals for such services.