Searching for a New Office? Should You Lease or Buy?
Most businesses may someday need a new office. If you are contemplating the future of your business space needs, the options of leasing office space and buying new office space present pros and cons.
Three Critical Questions
When deciding between leasing office space and buying office space, it is critical to ask three questions:
Is your business growing quickly?
If the business is growing fast or changing rapidly, leasing will give you more flexibility.
How long could you commit to office space?
For projected shorter-term commitments, leasing will be more cost-effective than buying. For anticipated long-term commitments, buying will be more attractive.
What is the local economy like?
That may present different cost advantages for leasing or buying.
Pros and Cons of Leasing Office Space
A low initial financial commitment requires only a deposit.
Tax-deductible lease payments.
Easier to leave if your needs change.
Repairs and maintenance are handled by the landlord.
Some utility costs may be paid by the landlord.
Lease payments will usually increase when a lease is renewed.
You are at the mercy of the landlord for repairs and maintenance.
Pros and Cons of Buying Office Space
Ownership builds equity.
Mortgage payments will remain constant.
Interest payments are tax-deductible.
You have control over the use of the property, including any changes (within local ordinances) that you want to make.
There is a sizeable initial cost including closing fees.
Opportunity costs must be considered. For the use of funds required to purchase the space.
You must pay for all operating, repair, and maintenance costs.
If you move, you must sell the property.
It is important to review all the considerations and run the numbers before deciding on a space. Then get financing assistance as needed.
Seek Expert Financing Assistance
Contact Gipson Commercial Solutions for the expert financing assistance you need to meet your business goals. We provide a wide range of tailored financial solutions.