With the internet replacing the use for some physical brick-and-mortar stores, a lot of businesses still need physical space. As a business owner, you may be wondering if it makes sense to buy commercial space as opposed to renting. Even though there is no right or wrong answer, you may want to take a couple of factors into consideration.
Benefits of Owning Property for Your Business
When buying commercial property, you have more flexibility with the way that you manage the space. You could divide the building and rent out parts, or carry out renovations without the need for constant owner approval. You also won’t have to deal with rising rent prices, which may lead to you vacating the space before you had hoped.
Is Your Business Likely to Need the Space?
If you are a brand new business then, even with the benefits mentioned above, buying physical space may not be the right option for you. It can be hard to predict where your company is going to be in one year, let alone three or ten. Don’t forget, buying property is a big and long-term investment – be careful of the ties that a property will bring. Your business’s needs may well grow or change much more quickly than you anticipated.
Upfront and Ongoing Costs
When it comes to buying property, there are a lot of upfront costs to consider. Property deposits, survey and solicitor fees and mortgage payments are just a couple of the often large, upfront costs you will need to pay when buying property. Once you’ve secured your property, don’t forget about the monthly mortgage, electricity and water bills, as well as building maintenance and recycling services.
When renting, the building’s owner is usually the one who will deal with a number of the worries and expense that comes with owning a property. When you buy commercial space, this then becomes your problem to deal with.
Buying or renting commercial space is a big decision to make. As with residential space, it can seem like paying monthly rent is a waste of money, and you may have a landlord that controls your use of the space. However, when considering to buy a property, it’s important to remember that businesses can change rapidly. A large number of companies that once needed thousands of square feet of office space are now virtual and operate solely online. Renting can give your business an agile advantage that buying doesn’t offer. With all of this to consider, we recommend that you seek the advice of commercial property agents before you make your final decision.