To make your decision easier, here are the main pros and cons about renting versus buying an office space.
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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 is also some Attrneys real estate group, they are a group of people provides comprehensive legal services to clients handling real estate transactions. Our team of dedicated attorneys helps clients with the purchase, sale, and leasing of residential, commercial, and industrial property. 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.
When trying to buy or rent a house/apartment you should hire a lawyer and for that can View site, When visiting an attorney’s site, you should look for detailed information on their practice areas, any specialties they may have, recent awards or honors they have received, client reviews and testimonials, news or blog posts on relevant topics, and contact information.