If your business has a need for physical property, you have the option of either renting or buying. Largely, this will depend on the amount of upfront money you can provide, as a moving deadline may mean that renting is all you can afford in the first instance. Nevertheless, if you’re considering buying in the future when currently renting, or trying to decide between the two, here’s what you need to know:
Being Unaffected by Value vs Making Money on Value
With a rental property, you don’t have to worry about fluctuations in the market, as it’s the landlord who will be responsible for either making money or losing money on the investment.
However, when choosing to buy, you can benefit substantially with monetary gain if your property increases in value, meaning the property is an investment which can benefit your business finances.
Small Deposit vs Large Deposit
When choosing to rent a business property, you will only need a small deposit. You will need a much larger deposit for buying, meaning that it might take a longer time to accumulate it. Of course, if you’re moving from renting to buying, you can use your returned rental deposit to go towards your buying deposit.
When returning a rented business property at the end of the agreement and ensuring your deposit return, it’s important to consider extras such as deep cleaning. Especially in communal areas of the business, such as the kitchen or seating areas with carpet and upholstery, these will need to be returned to their original condition in order to have your deposit returned in full. It’s a good idea to employ end of tenancy cleaning services like those from Cleaner Cleaner Ltd to make sure nothing is missed.
More Flexibility vs Landlord Restraints
Owning your business property means you have more control over everything you do. You’re not tied to an agreement, so you can sell whenever you like, and you can also make changes, such as upgrades, to increase the value, or sub-let parts of the building to earn your business extra cash.
With renting, you don’t have the freedom to use the building as you wish, and neither can you exit a lease agreement whenever you feel ready to. You may be stuck in a rental agreement for longer than you’d hoped.
Extra Payments vs Minimal Payments
Buying a property means that you’re responsible for everything within it — including any repair work. Not only that, but buying a property means you will run into extra purchase charges, such as legal fees, during the process. Therefore, these costs can easily mount up when buying.
When renting, it is the landlord who is responsible for any repairs or upgrades to the property, so you don’t have to worry about finding extra money to solve property problems. Not only that, but the initial costs are considerably cheaper, owing to the fact that you don’t have to think about legal fees.
Final Thoughts
Ultimately, choosing to buy or rent is dependent on your business’s financial circumstances and its long-term plans. If you’re looking for a quick and easy move, then renting may be preferable, whereas if you’re looking for a long-term investment with more flexibility, buying could be better for you.
