By Indhira Desangles
This is one of the questions I'm most frequently asked by my clients and acquaintances, so today I decided to elaborate on my answer and share it with you, my readers, who may be facing this dilemma. Especially if you're starting a business or in the process of expansion or growth, should you buy or rent an office?
Honestly, there is no single choice or "right" answer, as it depends on many factors, for example: the profile of the company (multinationals, local companies, investment funds), what your short, medium or long term goal is, and what your budget is.
So, understanding this, I'm going to share with you below the advantages and disadvantages of buying and renting, respectively:
When you buy, you have many accounting/tax advantages because the assets belong to you and your company; however, there are many more advantages, and here I share them with you:
- You are the owner and you can stay as long as you want.
- You can make the adjustments and renovations that your space or company requires, for example: placing personalized signs, without having to ask permission or authorization from anyone.
- If you wish to sell it, you will have the profit only for yourself and, in fact, you can obtain what in real estate we call a "capital gain" (Increase in the value of something, especially real estate, due to extrinsic circumstances independent of any improvements made to it).
- You can rent or sublet, if you wish, whenever you wish.
- It is an interesting long-term investment, as real estate is currently an investment tool that in most cases outperforms current financial offers.
However, it also has some drawbacks that are important for you to be aware of:
– Expenses are high: renovations, maintenance, taxes, negotiations with less desirable tenants, so it's important to have more cash on hand to deal with unforeseen events.
– Even if the business doesn't work out as you want, you still have to assume the costs that a property entails.
When you rent, you also have several advantages, such as:
- The length of stay has terms that you choose: that is, you can make a short, medium and long contract.
- Depending on the rental agreement, the property is often already suitable and you don't need to invest in renovations, as these offices are usually ready.
- Your capital has less investment risk, meaning that if for any reason you can no longer or do not wish to continue there, you can simply coordinate the handover to the owner beforehand and you save yourself the sales processes, not to mention the costs of maintenance procedures, taxes, tenants, etc.
- You have the advantage of being able to locate or relocate to a central and safe place and to grow or shrink according to your needs.
There are also drawbacks you should consider, for example:
- If you decide to make any adjustments or remodeling with your capital, there is a risk that (despite having a contract) you may have to leave the office and that the investment will not be profitable for you.
- Regardless of how your business is doing, you must accept and respect the payment clauses in the contracts, and these are often quite strict.
- You may not be able to sublet the extra space you have.
As you can see, everything will depend on the client profile because not everyone wants or is looking for the same thing. That's why it's important to know where you stand, and for that, it's very important to have the advice of a real estate expert.
So if you'd like me to help you find the right option for you, just contact me:
Website: desangles.properties
