What’s one of the first things you think about when starting a business? Where will you operate? Where is your business going to be located, which then leads you to another question on how you will obtain the premises. If you work from home, this isn’t an issue for you. But, anyone that works out of an office, store, warehouse – you name it – will need to consider if you should buy or rent your premises.
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Most people opt to rent, but is this a wise choice? To help you make a more informed decision, here are some pros and cons:
More immediately affordable & accessible
Renting a workplace is easier for most people to afford right away. Not only that, but it’s more accessible in the sense that you just find an available place and contact the owner. As long as you pass their checks, you can move in ASAP. When buying your workplace, you have to deal with all the usual shenanigans involved in buying property. This can take months to come to fruition, not to mention you’ll need a lot of money to afford a deposit.
Less control over everything
A downside of renting is that you have less control over everything. Your landlord might decide to sell the building to someone else, who then wants to use it for their own business. Now, your business is kicked out and you have to look for somewhere else to work, causing massive disruption. On the other hand, purchasing commercial property gives you full control over your destiny. You don’t have to worry about being evicted or dealing with an increase in rental rates.
More freedom for a growing business
You can argue that renting your business premises gives you more freedom to grow. Let’s say you buy an office, you’d need to ensure it was large enough to accommodate your growth. It would be costly, particularly as you wouldn’t use up all the space initially. Then, you might still outgrow the office, meaning you need to find somewhere else. It can be harder to move as you have an office tying you down, which you may need to sell. By renting, you’re basically free to leave and find a new location whenever you see fit. This helps when you’re growing, but it can also be handy when you may need to downsize. If times are tough, you can save money by moving into a smaller place with cheaper rent.
An extra source of income
Without a shadow of a doubt, the biggest benefit of owning your workplace is that you have an extra source of income. If you have spare rooms in your property, you can rent them out to other businesses. As such, people pay you every month to use this commercial space. It lets you open up a new revenue stream without doing anything!
In conclusion, buying your business premises is probably the ideal scenario. However, it’s not always possible because of how expensive it can be. Sometimes, it’s better to rent in the beginning, then consider owning your workplace when the money is there.
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