Office Space: Leasing vs. Buying

May 18, 2018

As your business expands, you may be debating whether to broaden your physical footprint as well. Choosing the right real estate option for your business can make or break your budget.

Love to Lease?

If you are looking for commercial real estate options but aren’t ready to commit, leasing could be the right fit. Your company could benefit from leasing short-term commitments as you try out different real estate options. Your business will not have to provide as much cash up front (compared to buying), and lease costs are often tax-deductible.

There are a few downsides to leasing. If you lease, there’s a lack of control related to property changes, repairs or other issues. From an investment standpoint, you won’t have equity in the property. You also risk the chance that rental costs and fees may increase over time. However, if a long-term commitment might not be right for you, this is the safer bet.

Is it Better to Buy?

Buying a real estate property can be a great investment if you are ready. The search can be tough, but once you’ve found the perfect property, your company can start investing from the ground up. If you own the space, you can make necessary renovations and additions to fit your needs. You can also sell the property and most likely gain back your investment if your company grows beyond the space—equity in the property will increase as the mortgage is paid off.

Consider all the aspects of buying real estate space. Over time, you might see a decline in your property value. On top of that, you could run into financial obstacles while you secure the funding needed to purchase property. Finally, if you own your brick-and-mortar, your options are limited when it comes to team location and company home base.

Still not sure which option to choose? Explore other office space options.