Leasing versus buying office space is a question that has many pros and cons. Business owners should weigh the pros and cons of leasing or buying office space. Here are the key facts of leasing versus buying office space.
The Pros of Buying Office Space
Fixed Costs: Locking in your commercial mortgage long-term can give your business clear, fixed costs.
Tax Deductions: The associated costs of owning and running a commercial space can provide tax deductions in the form of mortgage interest, property taxes and other items.
The Cons of Buying Office Space Buying
Lack of Flexibility: A new or growing business may experience unexpected needs in the future.
Upfront Costs: Buying commercial space will initially cost far more upfront. There are property, appraisal and maintenance costs along with a large down payment and possible property improvement costs.
The Pros of Leasing Office Space
Prime Property: A leasing office space option provides a business with the chance to rent in an area with a good location and high image.
Free Up Working Capital: With your money not tied up in real estate your business can respond to opportunities in the market.
The Cons of Leasing Office Space
Variable Costs: With a leasing option you may be subject to annual rent increases and higher costs at the time when your lease expires.
No Equity: While leasing you will be funding someone else’s retirement with your lease payments. However, owning requires you to get involved in the property management business.
Once you have selected the right office space, consider creating a mobile office that allows you to work from anywhere. While your primary office space will be your traditional “home base,” your mobile office can be a great way to stay in the loop, even when you are out of the office.