Break out your spreadsheets and start crunching the numbers. This might be a familiar activity for a lot of daily needs (unless you’re using FieldPulse Contractor Management Software to manage your business). Deciding to rent or purchase office space is something any good business owner spends extra time on. Here are some options you should consider carefully before making your decision.
The Benefits of Leasing
A commercial lease has a number of benefits that those who own may not even consider.
Not having to put a down payment on a building is something that can help a small business just getting its start. The down payment you have to put on a building can be a significant portion of your startup budget. Instead of spending huge sums of money in the early days, it might be better to get a commercial lease so you’re spending less upfront. Once you have your feet under you, you can always choose to purchase at a later date.
Tax deductions flood in for those who lease office space. You’re likely able to deduct the cost of your lease on your taxes, and it’s even possible to throw a few other office expenses on tax return. Always talk with a tax professional about your specific situation.
If the building you’re leasing has extra office space available, you can include terms in your lease that limit who the landlord can rent the extra space to. A commercial lease isn’t just about protecting the rights of the property owner; the tenant’s rights are just as important. If your business would suffer with a competitor nearby, get that restriction on the lease. While you might still have to worry about competitors in other buildings nearby, at least they won’t be in the same building.
Finally, it’s important to count the value of not having to do maintenance or repairs on your own building. These can be major costs, even if you’re handy and can do most of them yourself. That takes a lot of time, and if you can’t do the repairs yourself, you have to spend time and money to schedule maintenance with electricians, plumbers, or whomever else you might need.
The Benefits of Buying
When you purchase your own commercial building, you have a set payment every month, for the duration of the financing term. This payment amount won’t change unless you arrange it, and you’ll never have to pay over it, though you can if you want to. Renters, on the other hand, have to worry about their rent going up when they renew their lease.
When you own a building, if you don’t need to use all the space, you can sub-let parts of that space to other small businesses. That way, you can recoup some of the costs of having the building in the first place. This can be very appealing, but it might only offset a portion of your costs, depending on your costs and local office space demand.
So which is better? Renting or owning? The answer to that question varies for each company, based on their circumstances. Many new small businesses find that renting is better, but buying might be the better option if it’s right for your situation. Crunch the numbers for your business and choose which works for you. And if you’re looking to manage the rest of your finances, customers, and projects, consider looking at FieldPulse Contractor Management Software.