Office Space – Buy or Rent?
One of the most difficult things you can do as a business owner is find the right space for your office. So many factors come into play that you have to consider in order to make sure that you get the right space it can be tough to keep them all straight. Before you begin looking for your office space you need to answer some basic questions.
The first question is whether to rent or buy. Owning real estate has many positives but also just as many negatives. First if you are planning to grow or expand purchasing may not be the best option. If your company were to outgrow the space you have purchased it can be very expensive to add on to it or worse, pay for a new property. While there can be money made on real estate the cost of purchasing and selling property is very high and even more so with commercial property. Also having to move your entire office space is extremely time consuming and can severely disrupt the operation of your business. For this reason only look at purchasing real estate if you know that your business will not expand beyond the space in the first five years or so. On the other side though if your business is stable and you do not think that you are going to need additional space, purchasing your own property has many advantages. The first is that you will not pay the premium that you would if you rented. You can also make any changes to the property that you want and do not have to seek approval from the land lord. You also do not risk being forced to move if the building is sold and the new owners no longer want you as tenants. In this case purchasing is a great option. Purchasing also works well if you are looking to establish a known location for your business. Renting you will never be able to truly have it be a headquarters and main spot because there is always the chance that you will end up having to move. By purchasing this will never be a threat unless you do so by choice.
Another reason to look at purchasing over renting is if you are looking to use the property as an asset towards your business. While the recent changes in the economy may make this seem risky the truth is regardless of where you live whether it is Buffalo or Saint Louis investing in commercial properly can be very safe when done properly. The mistake many investors make when looking at commercial property is that they do not think long term and sell the property in the short term. If you are planning to use the real estate for your business and are thinking long term than purchasing is a great way to build capital and equity for your business. You can use the property to secure loans in the event that you need extra cash to support the business. In addition if you are patient enough selling the property years down the road may be a great way to turn a profit and actually have your office space return money to the business rather than being an expense. It is important that you choose your location properly in order to ensure that this happens.