Office Space: Building vs. Leasing

January 14th, 2016 | by Norbert C
Office Space: Building vs. Leasing

One of the long-lasting business dilemmas, building vs. leasing, still occupies the minds of millions of entrepreneurs around the world. Buying or building a place of your own sounds great, but it has to be justified by your business needs. On the other hand, leasing might look like an easier option for a business owner, but it could become a waste of money after a while. Now let’s dive into further details on these two office space options.

Business Beginners – Leasing Looks Better

When you are at the threshold of your own business career, spending too much money to buy a building that will host your office(s) could be a too bold move. If your focus is on financing the office premises, you will lose on the business side of your company. So, buying or building a special office space is not an option for business beginners. What they should do is keep renting office spaces until they have enough assets to get an affordable loan or buy an office for cash. Some governments even offer new businesses special conditions and pieces of advice for renting office spaces.

Office Space: Building vs. Leasing

Growing Companies – Financial Seesaw

Let’s say that you have been running a small business for a couple of years now. It has already become a medium-sized business and you realize that you need larger capacities in every sense, to keep the things roll in a desired way. This is the right time to go to your bank and try to negotiate a loan. Of course, never put your liquidity and your workers’ salaries at risk to buy your own premises. Only when you see that such an investment cannot harm your everyday business tasks should you go and invest in your office.

The Matter of Location

When you are leasing an office space, you should pay attention to the location, as well. It goes without saying that renting an office in a down-market neighborhood is a more affordable option, but you should also take your workers’ safety into consideration. Moreover, a location that seems attractive today could easily become a second-rate one in the years ahead. If your business has steady growth, the most logical move is to buy an old house or a building and replace it with a new office building, say trusted Australian demolition contractors. What matters here is that patch of land, which has a lower price with an old, dilapidated house on it; you simply remove the old place and build your own business paradise.

Office Space: Building vs. Leasing

Do you need Investing in Real Estate?

The bottom line is that every entrepreneur needs to sit down and think hard whether or not they want to turn into a real estate investor. This is what you become when you buy an office space of your own. Also, taxation policies are different when you own the place where your business is situated. For instance, Australia has clear rules about the taxes and registration forms required from owners of commercial properties; more about it here. So, if your assets are sufficient for normal business operations, but scarce for the load of taxes that come with a property ownership, keep leasing the office space and work in peace.

It is no wonder that everything in the world of business depends on money. Whenever you have serious doubts about your next steps when it comes to leasing or buying an office space, always contact and consult experts. Paying their assessment is much less expensive than making a mistake that you might be paying for a long period of time.