The majority of small business owners can afford to lease office or retail space when they are just starting out. Leasing unfortunately consumes a larger part of their monthly budget. However, money is not the only reason to select renting over owning a business premises. To determine whether buying or leasing would work better for your case, consider the following benefits of each.
Owning a business premises is advantageous in a number of ways. Here are some of the most notable among these.
A business workspace is an investment
Real estate is an important investment that pays off over time. Granted, property values in recent years have been on the decline. However, this means that the property you buy today is guaranteed to appreciate in value over the next few years. Given the low prices in properties and interest rates, today is best time to purchase a commercial real estate for people in need according to the experts.
You are your own landlord
By owning a property, you have total control over what to do with it. For instance, if you want to paint the walls green or update the doors and windows, you do not need to get permission from anyone else. This freedom comes in handy as your company expands or evolves.
You can be able to save money
Owning a property offers you the chance of refinancing, something that eventually helps you to pay off the mortgage balance, after which there is no more monthly payments. Since rents are subject to increase over time, owning a business premises is better than leasing one in the long run.
Tax deductions and advantages
By owning a business premises, you can claim tax deductions for all costs that are associated with maintaining the space and running the business in it, including interests on mortgage and property taxes.
Since you own the business property, you have the chances of renting out a portion of it to another tenant so as to generate some extra income. Apart from this, if you completely outgrown your premises, you have the option to rent out the whole space while you move to larger premises.
With own business premises, you also have the added benefit of having access to equity, capital growth and more refinancing option.
While searching for office space for lease in Toronto can be a tedious process, there are quite a number of benefits attached to it. Here are some of these advantages in no order of importance.
You have short-term options
You business might grow out of its current space, meaning that it has expanded beyond your wildest dreams. In this case, you will need to look for extra space to accommodate your current business requirements. By signing a lease of two years, you have the option to move to a new space to cater for your expanded business needs. Leasing also offers you the chance to try out another area of your town to determine whether it is a convenient spot for your staff and clients.
Most maintenance is handled by the property management
When you lease a business premises, you have the advantage of having some of its appliances, for instance the air conditioner, repaired or maintained by the property management. All you have to do is to call the property manager and wait for someone to show up and fix it. On the other hand, if you own the same space, you will be forking over hundreds of dollars on repairs every time something major breaks down or fail.
No down payment is required
Basically, you require a down payment to purchase a business premises, or any other property for that matter. This usually takes a huge chunk of startup cash reserves or budget. By leasing a commercial property, you have the opportunity to invest that same capital in growing or expanding your business. This way, you can be able to purchase your own premises later on when your finances are stable.
Leasing is not necessarily a long-term financial commitment, something that is quite beneficial for those that are just starting out. Although a business owner enters a lease agreement that has a fixed time frame, once the lease expires, he or she has the opportunity to immediately leave the property and move in to a better one.
Prime property and location
The option to lease offers the business owner a chance to opt for a wide range of properties, and that are located in good locations. This way, he or she is able to have located spot that he or she could not otherwise be able to afford. If you business is dependent on image and location, the leasing option offers a more affordable solution. Leasing also offers you the ability to focus fully on running the business, leaving the management of the commercial property to someone else.