While in normal life renting is often seen as a stop-gap, and something that is to be avoided, the same cannot be said for the world of business. When it comes to business premises, many companies – including huge, multinational corporations as well as some newer businesses who could more than afford to buy if they so chose to – tend to rent instead.
It is a simple fact that there are advantages to renting premises, with perhaps the most significant being that doing so requires less up-front investment. However, while renting may be considered a normal state of affairs for most businesses, it’s important to remember that’s not your only choice – and if you choose to buy, you can look forward to the following benefits…
#1 – Lower monthly costs
Of course, there’s no specific way of guaranteeing that you’ll pay less on a mortgage than you will in rental costs, but it is highly likely that that will be the case. This means that your monthly operating expenses will be far lower, which frees up space for investment in other areas of your business.
#2 – Security from rent rises
If you choose to rent your premises, you will live under the constant threat of rent rises from your landlord. These rent rises can be genuinely catastrophic to your business; as https://www.ccim.com/cire-magazine/articles/leasing-lessons/?gmSsoPc=1 shows, the average annual rent increase for commercial properties has been nearly 3%, which can be hugely problematic for smaller firms. In the worst case scenario, a rent rise could leave you trapped in a situation where you cannot afford the rent increase, but you can’t handle the inconvenience and stress of moving.
#3 – Preferable opportunities for expansion
If you wish to expand your business while renting premises, your options will be rather limited. You may be able to get permission to build and develop from your landlord, but it’s unlikely, and even if it were agreed to, you’d be investing money to improve a property that you do not own and cannot consider to be an asset.
However, if you choose to work with the likes of https://weisblattlaw.com/commercial-real-estate/ and buy your premises, the possibilities for expansion are endless. Outside of standard zoning and building laws, you won’t need to obtain permission, and your company’s assets – rather than your landlord’s – will be bolstered by any work that takes place.
#4 – Value increases
When renting business premises, the property only becomes more expensive over time, costing your business more as the years pass. However, when you own your property, there’s a good chance that your premises will actually grow in terms of their value. This means that when you come to sell your premises – either to move on to pastures new, or because you have sold the business – you could find that market rises allow you to enjoy a substantial profit on your original investment.
Renting may be seen as the choice for businesses, but there’s plenty to be enjoyed if you decide to go your own way and buy your premises instead.