The Pros and Cons of Leasing vs. Buying Office Space

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All growing businesses, whether in its infant stage or already established will someday face the major decision of owning an office space. However, most office spaces are either available for lease, rent or purchase thus putting small businesses in the dilemma of which of the choices will best suit their needs.

After having battled the major dilemma of deciding on whether or not an office space is needed, business owners may feel lost regarding the pros and cons and as such, the best decision to make when presented with the options of leasing or renting an office space.

In choosing an office space, there are a number of factors to consider which can be found at https://www.austintenantadvisors.com/office-space/ and as such, to lessen the complexity of the decision making process, below are the pros and cons of buying and leasing an office space.

The Pros of Buying Office Space

Fixed Costs:

Buying an office space allows you to lock in your commercial mortgage on a long-term basis and as such can give your business clear, fixed costs.

Tax Deductions:

The cost attached to owning and running a commercial office paid for by the company may qualify the company for some form of tax deductions in the form of property taxes, mortgage interest and other items.

Additional Income:

Businesses make additional income from their office building by renting extra offices out to other businesses.

Retirement Savings:

Owning a commercial space allows for long term benefits in terms of property appreciation and the possibility of selling off the property on the long run.

The Cons of Buying Office Space Buying

Lack of Flexibility: 

Buying an office space tends to make the business rigid and lack flexibility in that the office space may become inadequate over time due to the growth and expansion of the businesses in terms of size and capacity.

Upfront Costs:

Purchasing a commercial space costs more initially and may affect the finances of the company significantly especially when it fails to break even on the cost in the shortest possible time. In addition to this, owning a commercial space increase cost in terms of building maintenance and more.

The Pros of Leasing Office Space

Prime Property:

Leasing an office space allows you to choose the best property which best suits your needs and those of your business in the area of choice for increased business growth.

Free Up Working Capital:

Leasing a commercial space allows you spend less on getting a business location while freeing up more money for expansion and other financial demands of the business.

More Time: Any type of ownership comes with headaches. A leasing option affords the time to focus solely on running your business.

The Cons of Leasing Office Space

Variable Costs: 

Leasing an office space subjects the business to an annual running cost in form of rent increases and higher costs at the time of lease expiry.

No Equity:

The leasing option robs business owners of equity thus meaning they are funding somebody else’s retirement with their lease payments.

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