Renting Vs Buying an Office Space? Which one is Better?
Office space is an integral part of our day-to-day life. So, what should you choose buying an office space or renting an office space? Let’s get dive into what is beneficial for you.
The most important quality for an investor is temperament, not intellect. You need a temperament that neither derives great pleasure from being with the crowd nor against the crowd.
– Warren Buffett
Renting an Office Space:-
Benefits of Renting an Office Space-
Renting offers maximum flexibility. When you rent office space, you aren’t tied to the location, square footage, or monthly payment for longer than the length of the lease. If you don’t plan to stay in a location for more than a year or two, or if you expect your office needs to change, renting may be your preferred option.
Renting requires minimum property maintenance.
Depending on the market, renting may allow you to establish your practice in a desirable location that you couldn’t otherwise afford.
If your practice is part-time, you can share the cost of the space with other practitioners.
Renting can put you in proximity to other specialists. For example, if you rent space in an IT office building, you may have the opportunity to develop relationships that grow your practice.
As a renter, you don’t build equity in the property.
Your rent is likely to increase over time.
You may have to deal with a difficult or unreliable landlord.
Buying an Office Space:-
Benefits of Buying an Office Space-
For most practitioners, the appeal of buying office space lies in the potential to build equity in the property. Over the long term, if the property appreciates in value, the office may become a good investment vehicle.
You may also benefit financially by renting to a tenant unused space in a property you purchase. This provides an additional income stream to fund the mortgage or other expenses. Some practitioners buy more space than they need and rent out the extra space until their practice expands to fit it. Others rent out unused space if the practice decreases in size and they don’t want to move to a new location.
Unlike renting, there are fewer restrictions on remodeling, upgrading, or decorating the space.
Demerits of Buying an Office Space-
As an owner, you are responsible for property maintenance, which requires an investment of time and money whether you take on this task yourself or hire a property manager.
You will have to pay taxes on the property.
While buying office space can provide financial benefits, beware of potential financial pitfalls. For example, if a building declines in value, or if you need to sell and you can’t find a buyer, you could lose money in the deal.