Why Leasing Office Space May Be Better for Your Business
It’s easy to get tempted by the business model of buying and selling, but for businesses starting out, an office space lease may be a better bet than buying office space. Even large, established businesses can benefit from an office space lease if they are looking to trim down on operating costs or unsure of where business growth will lead. Depending on the type of business, there are many different requirements for the perfect commercial space. Whether your business needs a lot of space, a short-term fix while you make long-term decisions, or someone else to deal with property management, here are some benefits of leasing:
Although money is not the only factor when it comes to deciding whether to buy or lease commercial space, it is an important part. For a small business or start up who may not have the capital to buy, leasing makes a lot of sense. An office space lease usually only requires first and last month’s rent instead of a large down payment or deposit, so that means less money up front. The money your business saves from not buying can be used elsewhere and you will not lose any money from declining property values.
Leasing gives your business the option of trying out a new location, seeing how a space works and moving on with a lot less hassle. For example, say your business grows exponentially in a few years and you need more space or you need to move to a more convenient location for your employees or clients. After your lease is up, just pack up and leave. However, this does leave businesses open to any lease changes, rent increases or extra costs associated with the property.
Any business looking at leasing or buying should consult with a professional to see what tax implications will relate to them, but generally, most lease payments are tax deductible. Most businesses can deduct rent payments because it is a business expense. The credit score of a business is also not as critical for an office space lease as it is for buying.
Maybe your business is not ready to make an investment in a property, or the business wants to focus on other things. Leasing can certainly take a load off when it comes to managing property! In the end, it’s important to find the balance that works best for your business.