Buy business space vs. rent? The advantages and disadvantages at a glance

To make your decision easier, here are the main pros and cons about renting versus buying an office space.

Many entrepreneurs are confronted one day with the question of whether it is better to buy or rent the office space. Where as when you are moving your business to Mexico, give your preference to the Shelter services. Mexico has a highly growing industry in manufacturing. While establishing your business there, it becomes crucial to have excellent shelter or workspace for your office. Hence Shelter Services play an important role here. The shelter program will also help you to select the right site for your business or company.

In a world оf specialization, the best websites for stock research dictate that іt makes mоrе sense fоr smaller manufacturing operations tо focus оn whаt thеу dо best – produce a product- instead оf investing іn industrial buildings, international attorneys’ services, accountants аnd creating thеіr оwn Mexican human resources infrastructure.Reasons abound fоr choosing a Mexico shelter program аѕ a means bу whісh tо initiate аnd maintain low-cost аnd low-risk manufacturing operations.

Well once decision made about shelter we have to move towards the important thing is liquidity or money. Certainly in times like these with low interest rates for business loans , we as an entrepreneur all think about it; Do I have to own the business space or do I have to rent. We express the answer to this question for you in the pros and cons. An SME entrepreneur must carefully weigh the pros and cons of renting or buying a commercial property. Especially now, with the extremely low interest rate.

 

The benefits of buying office space with a mortgage

Fixed costs – The mortgage annuities will be fixed for a long term, while the rent can increase every year. Especially now with the low interest rates this can be very beneficial.
Additional Income – Owning your office can offer the advantage of renting out extra office space, creating another source of income.
Retirement Savings – The prospect of owning commercial space that can increase in value every year allows the owner to create additional value beyond that of the business.
Tax burden – It can be interesting to buy the property privately and rent it to the company. This can result in a lower tax burden in the company, because the rent is included as costs.
The disadvantages of buying a commercial property with a mortgage

Lack of flexibility in space – If your company continues to grow or suddenly becomes much smaller due to setbacks, your own office space can be a problem. This allows even a sale of the property to be enforced. Especially with young growing companies this should be monitored.
Upfront costs – Buying commercial space initially costs a lot more upfront. There are ownership, valuation and maintenance costs. Along with a large down payment and potential costs for improving property.
No flexibility in costs – Fixed repayments and interest that have to be paid can actually cause a disadvantage in the event of a setback. When things go bad you can easily change space if you rent. If the property is in possession, you must continue to pay the charges. Often poor performance of your own company is accompanied by poor performance of the economy, which in turn can cause a decrease in the value of your property. This means that the property can be ‘underwater’ when you want to sell in order to survive.
The benefits of renting a business space

A-location – The rent of office space offers a company the opportunity to rent in an area with a good location and a high image. If your small business depends on location and image, such as shops or restaurants, the rental option is much cheaper.
Free working capital – If your money is not tied up in real estate, your company can capitalize on market opportunities. In addition, your ability to borrow money is not as limited as when buying office space.
More Time – Every type of property comes with headaches. The option to rent offers the time to fully focus on running your business.
The disadvantages of renting an office space

Variable Costs – With a rental option, you may be subject to annual rent increases and higher costs as your lease expires.
No equity – While renting, you finance someone else’s pension with your monthly rent payments.

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