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To Buy or to Lease: Which Is Best for Your Business?

Posted by bethkua on May 26, 2016
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Whether to buy or lease property for business is decided case to case. As different organizations have different needs, so it is with regards to the space where they will operate. What is right for one business may be risky for the other, no matter how similar the two may seem.

When deciding on whether to buy or lease, be careful not to base your decision on the decisions of others. Instead, look at your own business and consult with your realtor. Here are some things to consider when choosing whether buying or leasing is best for you.

When to Lease

If you are a start-up or are still in the process of establishing your business, it would make more sense for you to lease a space. Leasing means not having to worry about rising interest rates or overrun costs during renovation.

For young companies, leasing is generally better because, at this point, space needs are yet to be determined. If you purchase property that is already maximized from the get-go, you might have a difficult time expanding to your full potential later on.

In reality, most entrepreneurs would prefer to take the route of leasing. So unless you have a definite and inflexible reason to buy real estate for your business, choose to lease. It is generally less difficult, allowing you more time to focus on your growing business.

When to Buy

The first thing you must consider when thinking of buying real estate for your business is if you can afford to commit capital to a property while still maintaining a steady and healthy cash flow for your business. Only if your business is stable should buying be an option.

Companies with specific requirements in terms of technology and security would also benefit from buying property. Owning the property will provide your business the protection it needs.

In any case, whether you decide to buy or lease, make sure that you engage someone with real estate experience to handle the transaction for you. It’s always wiser to hire a professional who would know the right questions to ask and the pertinent issues to address in these matters.