If you are starting or growing a business that requires more office space, you’ll face the decision to buy or lease your space. The decision isn’t just a matter of capital and personal preferences. There are many factors to consider. Leasing office space can be an excellent choice for many reasons.
So, Should You Lease or Buy?
Before deciding which path to take, consider some important questions. First, how long can you commit to the property? If you feel that you can use the property for a long time, buying might become more attractive. (Seven years or more is a useful benchmark.) Second, how fast is the business growing? If you anticipate major growth, leasing office space will provide more flexibility. Third, what do the local real estate market and economy look like? Property availability and values can swing the decision one way or the other.
The Advantages of Leasing Office Space
Leasing office space offers these advantages:
- Instead of a major cash outlay to purchase an office space, a much smaller financial outlay is required for a lease. And there are no mortgage payments.
- With a lower initial financial outlay, a company’s cash flow is freed up for other uses. A higher cash flow will help boost a company’s credit rating.
- Lease payments are tax-deductible.
- Some landlords will do some remodeling to suit the lessee. Landlords will also usually handle the necessary maintenance and repairs.
- It is easier to leave a leased space when it is outgrown versus selling a property that is owned.
- Depending on the condition of the real estate market, it may be possible to negotiate a lower price on the cost of the lease.
- There is less tax paperwork.
It is important to look at all the advantages and run the numbers when considering leasing office space.
Seek Expert Financing Assistance
Contact Spearing Capital & Consulting, based in Tampa, FL. We strive to provide the best in commercial finance consulting along with a strong financial portfolio of loans to help your business grow and flourish.