Office Space: Buying Vs. Leasing
If you are wondering whether leasing office space makes more sense than buying, there are some distinctions that you should be aware of.
Buy or lease: which is right for you? Consider the following:
Leasing a Space
Perhaps the most compelling feature of a lease is the financial terms; typically, you won’t need as much of a down-payment as you will when you buy. This down-payment can cut into your operating budget or other resources, leaving you short on money. Another benefit of a lease is that you are not the one responsible for many elements of maintaining the property. That is, if something requires attention, repairs, or maintenance, the cost falls to your landlord.
While the flexibility of being able to move may be enticing, it can also be a drawback. Your landlord could decide to go another route or lease to another tenant; what if they decide to raise the rent or sell? Where will this leave your business? Remember, when you lease, you are living on someone else’s property.
Buying a Space
Investing in a commercial property might be the best solution for some businesses. It is possible to buy low and watch your property gain value over time. Interest rates are very alluring right now; it makes sense to consider investing at this time. Plus, you are gaining equity each time you make your mortgage payment rather than giving your money to a landlord. There is a sense of freedom and autonomy that comes with owning a property; you will be your own landlord! When it comes to making modifications or changes, you are in control of what you do. This may be invaluable to some prospective property buyers.
Consider these distinctions when deciding whether to lease or buy an office, work, or business space. Got questions about an investment? Talk to the money experts at Diamond Capital Financing today.