One of the most complex traumas that most entrepreneurs encounter is picking between buying and leasing an office space. While both buying and leasing offers a range of pros and cons, the decision-making calls for an elaborative analysis followed by effective financial planning in the interest of the business.
How to Decide if Leasing an Office Space is Better or Buying?
The decision of whether to buy or rent a commercial property constitutes several factors. While the cost, location, and property are the essential factors, enough attention must be spared for the financial standing of the local economy, business, and needs for expansion in the future.
For example, considering office spaces for rent in Greater Noida would be an ideal choice for the budding entrepreneurs, whereas buying an office space would be perfect for recognized and experienced entrepreneurs as it involves long-term commitment towards the location and substantial capital investment.
Benefits and Challenges Related to Renting/Buying
Benefits of Renting an Office Space
- Open Door to Deluxe Properties: As shared spaces are becoming the new normal, the budding entrepreneurs also can have access to luxe properties. Currently, the start-ups are offering rental office spaces in all the sought-after locations and enjoying all the pros of cutting-edge infrastructure.
- Flexibility: Renting an office space lends relocation liberty according to one’s convenience and preference. The arrangement is more apt for rapidly booming companies, particularly where are plans for business expansion in the future.
- Minimum Investment: The renting involves minimum investment as a refundable deposit. While the security might range from three to six months according to the landlords, the amount is still quite nominal as when compared to the down payment needed in buying a property.
- Lesser Responsibility: A rental office cut your multiple dilemmas related to the damages and repairs. For example, you would be solely responsible for maintaining the cleanliness of the interiors. However, it is the landlord who shall be responsible for the repairs and damages resulting from structural defects, plumbing, water leakages, etc.
Benefits of Buying an Office Space
- An Asset for the Lifetime: When buying one of the office spaces for sale in Greater Noida, you are building an asset that can also be put to use collateral security to get loans in the future. However, the decision of buying an office space must be monitored against the present situation of future goals, profits of a business.
- Deductions of Tax: If you are buying an office property with your loan, you will be allowed with the deduction of taxes for your monthly interest payments. This can help you make a considerable saving as the investment on property comprises of a huge amount.
- Freedom of Modification: As you are the property owner, you can get the interiors customized as per your convenience and taste. Unlike leasing where the landlords are often seen as incorporating certain norms related to property modifications, you have the liberty to modify a unit that you own according to your requirements.
- Leasing the Property: If the property is spacious and huge enough, you can easily put up the extra space for leasing purposes to earn extra monthly income. The rent that you would be availing against leasing the extra space shall also be subjected to tax deductions.
To summarize it, the decision of whether to buy or lease office space is solely on one’s choice. While buying an office space is appropriate if your run a large business and looking for waiving of taxes, renting an office space is the best choice if you demand cost-effectiveness, flexibility, and a room for some change.