Have you been looking at office spaces of recent? Ever considered if leasing the space is better than owning it or vice versa? Well, an office space is an office space regardless, except that there are specific variations that come with either outright ownership or leasing one.
There are also questions like “where is the most suitable location for your growth projections? How is the economy doing? Amount of space needed? Cost of buying versus leasing?” that must be considered when making decision about owning or leasing an office space.
In as much as purchasing an office space equates outright ownership, control and consistency, there are a number of benefits that comes with leasing an office space.
Advantages of Leasing an Office Space
One of the advantages of leasing an office space is the flexibility it offers, a tenant can easily decide to switch locations once the lease term is up or if they find their present location unfavorable to their business needs without running a loss. The flexibility of leasing an office space is also appealing to small business owners who are unsure of the market changes, growth projections or needs of their business.
Stability of Costs
The cost of leasing a property is relatively low when compared to owning one; tenants are exempted from unforeseen expenditures like cable repairs, reconstruction or any upkeep that comes with maintaining an office space. The cost incurred when leasing a commercial property is often fixed and long-term thereby giving tenants ample time to save or invest more in their business without being affected by the various market changes happening.
There is little to no risk involved when leasing a commercial property as all that is required to put down is a security deposit, tenants are neither expected to put down a collateral nor required to break a bank in order to pay for their leased space, moreover, the risk of committing to lease is nothing compared to the risk of purchasing.
It is a lot easier to maintain a leased office space as compared to a purchased office space. In leased spaces, tenants are unbothered about key maintenances such as HVAC maintenance, plumbing or building repairs and so on rather they are focused on inventing new ways to expand or invest in their business and how to pay up the rent and maintenance fees stated in their lease agreement.
One major advantage of leasing an office space is the tax benefits you get to enjoy as a tenant. A tenant can fully deduct his or her occupancy costs and any costs incurred during his or her lease duration such as property insurance, utility cost, maintenance cost, lease payments and other unforeseen rental expenses.
In conclusion, the decision to either purchase or lease a commercial property is solely based on the client however, a second opinion can be gotten from your tenant rep broker, since they are in better positions to tell what the current market value is and the possible feasibility of what it will be in the nearest future. After various consultations and opinions, clients are advised to still weigh the cost and benefit of each decision before coming to final conclusion.