What will you do when you discover that you need more space than your basement has to offer? What if you rented an office space and experienced a massive growth in your business — to the point that a single room won’t do. Should you stop renting and buy an office building instead? The questions below could help you decide the best move:
Are you ready to become a property owner?
The title of being a landlord — much as it appeals to many — comes at a cost. As a property owner, you must be ready to have an annual maintenance budget to take care of the building’s repairs, refurbishments, security, parking, insurance, and property taxes. When you lease an office, however, none of those would be your responsibility. The most significant upside of owning a property is that you can sublet and get extra revenue.
How well prepared are you financially?
Purchasing a property is a long-term commitment that requires a large down payment. Leasing, on the other hand, is a short-term commitment, and all you need is a refundable deposit. For most properties, a down payment equals to a month of rent.
To pay less on your rent and down payments, you can hire a property lawyer in Townsville to help negotiate with the landlord. These lawyers have a better understanding of property values in your location, so you won’t regret hiring their services.
Are you sure about changing the location of your business?
If you’re already leasing an office space, the decision to move out should have gone through many considerations. If your customer base is in a particular area of the town, buying an office space in a different location may not be an ideal move — literally.
What’s important to you, flexibility or equity?
Leases are more flexible, as they allow you to move out with ease. When your business expands, you will have more properties available for lease at your disposal for occupancy. When you purchase a property, on the other hand, you will have at your hand’s an equity that can be used as collateral when you want to borrow from financial lenders.
As a business owner, deciding whether to buy or lease an office space or not is a difficult decision. If you pay attention to your needs, finances, and market, you will easily make the best financial move for your business.