Office Space: Buy or Lease?

Office Space: Buy or Lease?

Every growing business will eventually face the question of how they are going to expand their site of operation. Moving to a bigger location could be a good move. The question is, should the new location be bought or leased? Buying or leasing office spaces are options available to every business owner who should also be aware of their pros and cons.

Commercial office spaces are a popular choice among small businesses that do not need warehouses or laboratories. Buying office space is for companies with sufficient financial resources and can be an option for those who want to enter another business such as real estate investing. Leasing, conversely, can be an option as it allows business owners and operators to have a clear cost associated with their physical operating space.

A wise business owner should first weigh the pros and cons of buying and leasing before moving into a new office space. When you buy an office space, you may be entitled to a fixed cost year after year. Tax deductions in owning an office space can be in the form of mortgage interests and property taxes.

It may not be advisable for business owners to buy a DC office space if the company is continuously growing each year. There may be unexpected company needs in the future which may not be addressed by buying space. Moreover, buying office spaces involves property, appraisal, and maintenance costs along with a large down payment.

If you are looking for a more affordable way to obtain a larger space, then leasing a DC office space can be your option especially if your business is dependent on location and image. Leasing offers a chance to respond to other opportunities in the market as your capital is not tied up in real estate. Types of commercial properties most businesses lease are business parks, industrial parks, and commercial retail properties.

Leasing a DC office space also has its cons such as variable cost and absence of equity. When you lease, you will definitely be subject to annual rent increase and noticeably higher costs as time goes by. Without equity build-up, you may find yourself funding someone else’s retirement with your lease payments and you may notice that modifications of your office space are controlled by the land owner.

For detailed information, please visit us at www.metroffice.com.

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