Buy or Rent Office Space
Deciding whether to buy or rent office space is a key decision you as a business owner must face. If you are a home business but do not have the initial capital required for a purchase, and are not sure if you want to expand, perhaps renting is right for you. On the other hand, if you are already an established business wanting to expand over time in one location, and you have the financial resources, buying the commercial property might best suit your business goals.
What to Consider Before Buying or Renting Office Space
Some of the following can hopefully clarify whether it makes better business sense for you to purchase or rent commercial office space.
Length of Operation at This Location
Though it is impossible to predict accurately whether your business will flourish, you may be planning to only be at this location for a short time, with the intention to relocate in the near future. Maybe your current business is just a stepping-stone to move on to other ventures within the next few years. In these cases, you are probably better off renting office space as opposed to buying.
Having a five-year business plan can be very helpful in determining your decision to rent or buy. If you cannot predict with reasonable certainty what size space will suit you down the road, you are probably better off renting. Moving out of a rental which your business has outgrown can be less daunting than buying commercial space that has outgrown your business.
Other Business Ventures for this Particular Office Space
Property that has become useless to you can be a large financial drain. If you cannot easily resell your property, rent it out to another business, or use it in a new way if the space is no longer suitable for your business needs, and you are not financially able to just wait it out until you can come up with a use, you should lean towards renting as opposed to buying. On the other hand, if you are an established business with no plans for change in the near future, it's certainly worth looking at the current market to see if buying is your best option.
Getting Help with Your Office Space Decision
Regardless of whether you decide to buy or rent office space, you should have a commercial real estate attorney look over any lease agreement or agreement to buy, to help you clarify your decision and ensure that whatever decision you make, you are legally protected in this business arrangement.