Many businesses are reaching to point where they need to ask themselves whether it would be beneficial for them to purchase office space rather than continue to lease office space,
or whether or not buying an office space from the beginning is favorable for their business. It is now becoming increasingly difficult to find affordable lease property in many cities and whether or not they are available for the premium price.
Despite businesses being different from one another, there are a few factors that all of them can relate to when it comes to evaluation of why purchasing a property is better than leasing. Important things to keep in mind are your business requirements such as long term space needs and expansion possibilities.
Benefits to Buying an Office:
- No more annual rent increases
- Ability to sublet excess space to other occupants
- Interest on the mortgage loan is tax deductible
- Improvements can be made to the property as you wish
- Possible benefit if you sell in an expanding market
- Opportunity to stay in one location as long as you decide
Disadvantages to Leasing an Office space:
- Rental rates with annual escalations written into the lease.
- Loss of the reversion or the value of the property at lease end.
- No opportunity for equity buildup as with owning property
- Owners may be forced to relocate at the end of the lease term