No matter the size of your business, you will need a commercial property to move into at some point in the life cycle of your operation.
Apart from a few small enterprises and some niche business models, your business is likely to need commercial premises during its lifecycle.
Whether you choose to buy or rent your premises, though, will come down to a number of different factors It is important to weigh them all up before you make a final decision on how you want to spend your money.
To buy
One of the biggest reasons to buy a commercial property rather than renting it is the fact that it offers you far more stability as a business.
There's never any danger of a rental period coming to an end, which means no negotiating a new lease and no need to panic and find a new office at short notice.
In addition to this, you also have the freedom of your own property.
You are of course free to operate your own business from within it, but if you should happen to outgrow your office, you are also able to move elsewhere and continue to bring in a continued revenue stream from the letting of your owned commercial property.
It will also act as a long term business investment. Demand in the market at the moment may be subdued, but down the line when the financial crisis starts to fade away, there will be a rising demand once more, and it could be that you make a large profit when you come to sell.
And finally, of course, you simply do not need to answer to a landlord. This is preferable because landlord-tenant debates and arguments can be among the biggest pitfalls in any business situation.
If you own your own place, though, you are able to paint, redecorate and change it whenever you see fit, which can represent a far better situation for your ever-changing and evolving company.
Not to buy
The biggest reason to rent rather than buy is quite simple - it's cheaper in the short to medium term. For smaller businesses, you have the chance to secure a commercial premises without having to make a large commitment to buy, and without having to outlay a large amount of cash on physically buying a new office.
And of course, if you're not buying, you obviously won't have a commercial mortgage which will mean that you are not in danger of being a victim to rising interest rates.
Other issues will include the fact that you always have the risk of property prices dropping as a buyer. If you own something and the market should take another crash as it did in 2008, you might be left with something on your hands worth far less than when you bought it.
On top of this, you also have the factors such as maintenance. If you are renting your commercial space, then it will normally be the case that cleaning and repairs are included in your monthly rates. For buyers, this will be just another additional overhead - not to mention a bit of a headache when you have a business to run..
And finally, renting gives you the sort of flexibility that is simply not on offer to those who opt to buy their own commercial property. If you were to experience a period of rapid growth, and owned your building, you may quickly discover that what you’ve bought isn’t suitable anymore.
If you are a tenant, relocating to a new location will mean simply waiting until the end of your agreement and then signing a new one elsewhere, whereas a buyer will need to find someone to sell to and go through all the legal processes before they can do so.
When you’ve decided on buying, leasing or renting, you’ll need to take a look at our essential checklist.
