When looking at commercial space for your business, you might be wondering whether you are better off buying or leasing the space you need. Here are a few things to consider when making this crucial decision.
State of your business – If your business is a start-up or is going through unusual growth, you’ll want to strongly consider if being locked into a property is truly advantageous. Renting your commercial space allows you to more easily relocate to a smaller or larger space, as the needs of your business change.
Ability to manage property maintenance – When you buy your commercial space, property maintenance becomes another item on your long list of responsibilities. If you don’t have the cash flow to cover property expenses or time to ensure the property is properly maintained, leasing may be a better option for you.
Long-term cost – In the first few years, leasing can be beneficial but eventually, rates go up. Rarely do rates for leasing commercial space drop. If your business is robust and has a healthy history of weathering the ups and downs of the market, buying a commercial space can help your long-term costs by keeping you out of the renewal rate hike cycle. However, if your business is less stable, leasing may be better for your long-term costs by giving you flexibility to relocate to a smaller space without the hassle of selling your existing space.
Location – If location is a significant factor for the success of your business and you have an option to buy your commercial space in a prime location, buying could be your best bet. Few things can impact a location-dependent business more, no matter how well-established, than being forced out of your prime location by renewal rate increases on your commercial lease that become unaffordable.
Ability to make changes – If you know you’ll want to make significant changes or additions to your commercial space, buying gives you the decision-making power to customize your space to your liking. Leasing your commercial space means seeking approval from the owner or landlord for every change you’d like to make – and the risk of them declining your request.
There are many things to consider when deciding whether you should lease or buy needed commercial real estate for your business. Our handy list will help you explore these considerations to make the best decision for your business. When you are ready to make the decision, James Haas, your Myrtle Beach RE/MAX agent is here to help!