Deciding whether to lease or buy office space is never easy. There are multiple factors that need to be considered in order to make a wise decision. And, even if what you decide is wise, there is no guarantee that it is right. Only time will tell whether you were smart to do something or not. But, let us not get hung up on what the future holds and let us have better look weather you should buy office space or lease it.
Leasing office space
Leasing office space can be a great idea. You simply give a monthly sum to your landlord and use the office space as it were your own. This makes budgeting your business a lot easier. Plus you do not have to worry if anything happens to the office space. if there is any trouble or something breaks, you contact the landlord. Furthermore, all the maintenance and renovation costs are paid by the landlord. This means that you are free from paying for large renovations.
To add to all of this, you are free to move your office whenever you see fit. If a better market opens up, or you simply find another office space more suited for your business, go for it. All you need to do is to estimate your moving expenses on time and wait out your lease for the office space. With that you’ll save a lot of money for your office move and business will suffer less due to it.
In the long run, leasing an office is always going to be more expensive than buying it. The more time you spend it that office space the better it is for you that you own it. Some people even end up paying the whole price of the office space trough leasing. This is why deciding whether to lease or buy office space is so difficult.
Owning office space
Owning an office space makes you the complete boss of it. Whatever change you deem fit for your office, you can implement it. Want open space so that there is plenty of air for your employees? Done! Want to add some private offices so that you can have civilized meetings? No problem. Whatever you decide that you want for your office, you can bring in. And, as it turns out, making your office look nice is terribly important. Your office space says a lot about your business, which is why you need to have the freedom to make it your own. You will not have to negotiate with your landlord and worry about splitting the bill.
Furthermore, owning an office space can be lucrative on its own. Remember, you are a landlord. If you don’t think that running your business from your own office suits you, you can simply opt to move it and rent the office space to someone else.
It’s not owning an office space that is the problem, it is the purchase itself. As you might guess, office space can cost a lot of money. Even for a modest office, you are looking at paying hundreds of thousands of dollars. For most people, this is not a small sum of money to simply play around with, which is why buying an office space is usually a big risk. If things don’t work out, you might end up in a lot of financial trouble.
Lease or buy office space – what is right for you?
When deciding whether to lease or buy office space, the most important thing to consider is your business. As we’ve mentioned before, there are both upsides and downsides to both leasing and buying office space. But, unless you consider your business and what kind of office space it requires, you will not make a wise decision. If you a starting your business up from scratch, there will be a period when it is smartest to lease office space, and the time when it is smartest to buy it.
When to lease
Jumping into buying office space is never a good idea. Especially if you have a new business in a market that is unknown to you. You do not know whether your business will work out. As time goes by you will figure out how to simplify your business and make it both more productive and lucrative. To add to that, you might be running your business perfectly, but you are simply not set up in the right market.
If you recognize that that is the case, you need to be able to freely move. That is not easy to do if you spend thousands of dollars on buying your office space just a year ago. So, until you are sure that the office you are currently in is the one for you, don’t buy. Stick with leasing it until safer, more predictable times come.
When to buy
Buying office space is definitely a step up for your business. Once you buy office space you are truly committing yourself. You are, in fact, tying yourself to the local community as a landlord and a business owner. This can be a great thing, especially if you plan on running your business for a long time. But, when exactly is the right time to take this momentous step?
Once you feel that you’ve got a handle on your business and that this is going as planned – that is the perfect time to buy. This usually means that you’ve figured out the market, for the time being, and that you are able to navigate your business in it. If that is the case, then you’ll be able to generate the necessary income to pay of the bank loan for buying your office space. After a couple of years, your loan should be gone and you will remain as the proud owner of your own office space.
Eddie Diaz has been a helpful advisor and a content writer specializing in office relocation for many years. While working with Number 1 Movers Hamilton Ontario he acquired the necessary knowledge about the moving process and all that is revolved around it. This made him appreciate the struggles of the working man and is now ready to help out with expert advice, whenever possible.