
(CottageLife)
Many businesses choose to lease commercial office space, but that is not the only option. In this blog entry we will clarify what the difference is between renting, leasing, and buying real estate, focusing on the pros and cons of commercial office space acquisition.
Rent
Renting a space means you are paying anywhere from hourly to monthly in a short-term agreement that is cheaper with longer contracts. Renting is beneficial for companies that do not want to lock in a year long contract. Maybe you want to try a space out or you know you will be moving shortly. In many cases, renting is called a month-to-month lease where you can decide to leave at the end of any month. Renting provides the best flexibility.
Lease
Leasing a space means you are in a long-term contract from a year on at a set rate. Leasing is most popular because it provides the right amount of flexibility for the right price; leasing tends to be cheaper than renting. Most offices are not going to move every couple of months, but they may not be at the peak of their growth or in the desired location of their business. For these reasons, leasing is a smart option for start-ups and businesses in other stages of growth. Further, when you lease, you are not responsible for building maintenance and repairs. Keep in mind that market prices may go up and leases are not always renewed.
Buying is beneficial for businesses that are established and know what is needed in their office space. Keep in mind, you do not have to buy a whole building; there are co-op commercial buildings that sell by the floor. Buying is cheaper in the long run and removes the worries of being at someone else’s disposal. You pay a fixed rate to pay off your loan and many times it is tax deductable.
Before you make the big step of buying office space, it is important to consider all business costs, such as equipment, office furnishings, wages, etc. Ask yourself, is your business ready to settle down and buy? And can your business afford to buy now? Buying office space means a large amount of money upfront. This can put a strain on furnishing the new office space and or current company production growth. Further, owning space means you are responsible for its maintenance, which is another added cost.
Use these easy guidelines to make the right decision for your company’s office space!

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