Credibly Logo

Buying vs Leasing Your Business Space: Pros and Cons of Each

Young,Businessman,Working,Writing,Notes,Sitting,In,A,Desktop,At

 

How do you perceive businesses that don’t have physical locations? Are you less likely to trust a company that doesn’t have an actual office space?

With the advent of the Internet and other technological advances, there isn’t always a need to have a brick-and-mortar office. Yet, if your company wants to expand, there are reasons to either lease or own business space.

Some companies look at it as an investment. Especially if your location comes with much-needed foot traffic. The good news is, even if you don’t have the budget to purchase a space, you can lease one. In fact, leasing may be the best option when your company is first starting out.

Credibly shares the main things to consider when deciding whether you should lease or buy space for your small business.

REASONS TO LEASE YOUR BUSINESS SPACE

1. A down payment isn’t necessary.

The best part of leasing is you don’t need to pay a significant amount of money up front. Regus.com.au is a company that offers a wide variety of coveted office space locations at reasonable prices for businesses in all industries. Since they have offered office spaces for decades, they usually have the most prime locations available.

This is quite beneficial for a startup budget, which can be quite minimal. When starting a new business, your cash reserves can help make or break your success. As a result, when you lease, you get to save your cash reserves for growing your business. If you have the budget at a later time, you can always opt to purchase.

2. You don’t have to worry about repairs.

What’s worse than going about your day only to have the air conditioning go out when it’s over 100 degrees outside? Who are you going to call? The air conditioner and/or heater will eventually break. Your toilet may leak one day. Over time, things fall into disrepair. You’re not a plumber or HVAC technician. You can’t stop business just because something needs to be fixed. When you lease, all you have to do is call the property manager and wait for someone to show up.

3. You can choose the term that best suits your needs.

As your business gets larger, you might need a bigger space. If you lease, you can move when your needs change. You haven’t sunk a large chunk of change in the property, so you don’t feel forced into staying. Plus, with leasing, you get to try out a space to see whether or not it works for your clients and your staff. The market will constantly evolve — your business needs to do the same. Leasing allows you that flexibility.

Related: Cost to Move: Is Relocating Your Business Really Worth It

REASONS TO PURCHASE YOUR BUSINESS SPACE

4. Space can be an investment.

There are many major companies that count on their real estate properties to pay off over time, despite any property value decline. The market is cyclical. If you buy low today, you can still see your value appreciate over the next few years. The best time to buy is when interest rates and prices are low. Sometimes, you should buy a valued property regardless of the environment. Of course, this is not something that should be taken lightly. It requires a lot of research beforehand.

5. You may save money.

A down payment will place a dent in your budget. On the other hand, you may have the opportunity to refinance and one day pay off your mortgage balance. If you had to move out of your property, you can rent it out to continue the income flow and help pay off your mortgage. If you’ve purchased a property in an up-and-coming area, count yourself lucky.

6. No one to tell you what to do.

When you purchase office space, you don’t have to answer to a landlord any longer. If you want to update the kitchen or paint the walls pink, you can. You don’t need to ask anyone for permission. If you want to rip out the carpet or add carpet, you can do just that. This is a freedom that some cherish in the business world. Sure, there is responsibility involved, but that your choice to make.

7. You negotiate your own terms.

You can work with the seller on the final purchase price, especially if they are motivated to sell. If they just want to get the property off their hands, then you get to benefit from that transaction. If you can offer a larger down payment, you may even get a better price. When you have the budget, and the funds, the power is in your hands.

What do you think about your choices between owning and leasing? It certainly helps your business to have a physical location where clients can walk in and talk to you. But, whether you lease or own depends on your budget. The good news is you have a choice, and both are quite good.

Author: Katrina Manning

Plan for the future with Credibly.

We recognize the unique financial needs of your business. Although we don’t provide mezzanine financing, we’re equipped to help you assess if this is the right path for you.

Our commitment is to understand your business’s potential beyond just the numbers. We’re here to offer insights and guidance—not just financing.
If you’re considering your next financial move and wondering if mezzanine financing fits your growth strategy, let’s discuss your options.

With experience supporting over 30,000 businesses, we’re prepared to help you make an informed decision.

Begin exploring your financing possibilities with Credibly today

Speak with a financing expert

Recent Posts: