No matter what business you have, there will come a time when you have to consider if renting or buying office space is a better option for you. While each type of business has different factors to consider in making their decision, there are several general things to consider that apply to all businesses. These general factors can help decide if buying is a good option or if you should continue to rent office space.
One of the largest factors to consider is price. When purchasing office space you can typically expect to pay between ten and twenty percent of the purchase price as the down payment. When you rent office space there is a much smaller down payment. If you have good credit, you typically only have to pay the first and last months’ rent which is about ten to fifteen percent of what is required when purchasing an office space.
If you are considering buying, you need to also look into what your return would be. Would it be worth your investment in office space or would your money be better spent making investments in your business while continuing to rent office space. If you think renting office space is better, you should look at the market first. When purchasing office space you will have a fixed amount of costs in the end. However, when renting office space your rent will be dictated by the market conditions. Another big factor to consider in your choice is that of growth. If your business is new or you are in a high growth mode, then continuing to rent office space would provide you with greater flexibility and fewer constraints to your growth potential.
You should also consider taxes. Most of the payments you make while renting office space is fully deductible. However, when you own office space the costs are written off over a longer period. To find out your best options in this area you should talk with a tax professional. While the process of choosing rent or buying can be overwhelming you can easily seek advice from real estate professionals. However, when you are going through the factors, it can be very easy to decide if buying office space is best or if you should just continue to rent an office space. If you decide to rent the office space, it will be better to opt for the serviced offices.