A case for owning your company building instead of leasing
Photo by Marc Mueller from Pexels
For most business owners, leasing your first office space is a brilliant idea- and this is rightly so. Hiring an office space comes with some advantages for any new or small business owner short term. For any business owner or entrepreneur looking to build a healthy and successful business, it is always wiser to start putting plans to own a company building instead of leasing continuously long-term.
When deciding to lease or own your office space, you need to consider a few factors. These include your personal preferences, the plans you have for the future of your business, and the state of the real estate market in your desired location. However, if you plan to continue doing business in your current location for decades, you should note the benefits of owning your business space.
First, you can consider your office building as an investment opportunity, as most business owners often have a retirement plan or some form of an exit plan in mind when it comes to buying a building. For example, if a business owner decides to sell their company, they still retain real estate ownership. This offers an appealing advantage to many business owners. In that regard, owning your company building allows you to generate extra revenue. Depending on the size of your company building or space you have, you can always rent some portions of it to other businesses even while you still operate from the same building. This way, you can subsidise your monthly mortgage costs or at least break even if you’re still paying for the building.
Most business owners, especially new and small-scale business owners, consider owning their office buildings as a substantial financial commitment they’re not ready to make. Contrary to this belief, owning a commercial property is more affordable than you may think. While leasing a property comes with its advantages, business owners who opt for leasing forego the value of equity growth and appreciation. Loan options allow the buyer to pay fixed interest rates on the fixed assets with extended terms.
Moreover, the long-term cost of a monthly lease makes leasing a more expensive option. Take the time to multiply the costs of your monthly lease by the number of years you intend to remain in business or in that facility, and you’ll realise just how you’re giving away to make your landlord rich. The earlier you consider buying instead of leasing, the earlier you start saving on those monthly loan payments for decades or even permanently.
There is also the option of building your office space from scratch. Of course, this will depend on your financial capacity, but it offers numerous long-term economic benefits. The most important thing is to ensure that you get all the expert assistance you need, from planning and design to topographical survey and the actual construction.
Although leasing can benefit your business, it is vital to consider these advantages of owning your business space. So, if you have the means of doing so today, don’t be hesitant.
