If you’re in a position where you can buy an office space instead of leasing it, then you may think, “Why not?” However, as with any large decision, it’s always best to be as well-informed as possible, so we’ve gathered together the pros and cons of buying and leasing so that you can decide which way is the best way for your business.
Pros of buying office space
- Tax deductions – Owning an operating a commercial space can give you expense deductions that will make a positive impact on your taxes.
- Fixed costs – Locking in a long-term commercial mortgage can provide your business with fixed costs. No more worrying about if rent is going to go up next year!
- More income – If you have extra office space, you can rent it out and make a little extra money.
Cons of buying office space
- Expensive upfront costs – Buying commercial property will cost more upfront, which can make things a little tight for some time after the purchase is made.
- Not much flexibility – If your business is still growing, you could outgrow the office space that you buy.
Pros of leasing office space
- Focus more on the business – By leasing your office space, you won’t have to deal with the extra work that can accompany owning the space. This time can be spent improving your business.
- Ideal property – Leasing could give you the opportunity to rent property in a prime location, whereas you may have to lower your standards if you’re looking to purchase.
Cons of leasing office space
- Variable costs – That’s right—rent could be increased annually, which can be frustrating for a business owner.
- No equity – While renting, you’ll be helping to fun someone else’s retirement.
There you have it—the basic pros and cons. Based on this list, which side are you on: buy or lease?
About the author:
Katrina Robinson is a freelance writer who covers a variety of topics ranging from home maintenance tools such as gutter guards to lifestyle tips and advice.
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