If you are in the market for office space then you have asked yourself this question before. You saw the title of this blog post and thought, “Hey, I need an answer to that…” and here we are. So, what is this magical right answer to the lease or buy debate? We hate to do this to you, but the answer is, “It depends.”
While both options can be great investments, one often makes more sense than the other. Primarily this has to do with where your business is at, and where you see it going. If you have a clear picture of both of these, than deciding to lease office space or buy office space should be easy one to make.
Below we outline the scenarios where buying or leasing office space makes the most sense. Which one sounds most like you?
[bctt tweet=”Do you want #CRE control or freedom? Determine if you should lease or buy office space. Answer these ?’s”]
Buy or lease office space. Which is best?
Buy Office Space If…
You are thinking long-term. A main advantage for buying office space is that it is a long-term investment with the potential to earn you profit over time. This is not a buy and flip scenario. Another benefit is cost savings realized through tax deductions and appreciation.
You want more control. When you own office space you are the boss and your own landlord. If you want to make any changes to your space you don’t need to get permission. Whatever property decisions that need to be made, like renovations or use (tenants), are made by you.
You found your Neverland. If you are looking for flexibility then you don’t the commitment of buying. But, what if you don’t care about being flexible because you have found your golden goose, your Shangri La? If you have found the perfect location for your business then you don’t ever want to give it up. In this situation buying office space in a location that contributes to high returns is a smart move. Being able to stay put, and hopefully getting in before the market value increased, is a huge advantage.
Lease Office Space If…
You like cash in your pocket. One of the main benefits of leasing versus buying office space is cash in your pocket from NOT shelling out a huge down payment for a property. Cash expenses at the beginning of a lease typically only include security deposit and first/last months rent. This is a huge advantage for businesses who are either just starting out or who have tighter budgetary restrictions. This allows cash liquidity that can go towards building your business or help you out during economic downturns.
The only room you want to clean is the one you sleep in. In a typical leasing structure the tenant is not responsible for the maintenance or repair of their office space. It truly is a lovely thing to simply call someone else when something breaks. AC on the fritz? Call the landlord or Property Manager. Leaky roof? Call the landlord or Property Manager. From exterior to interior, not being financially obligated for most of your space upkeep takes a lot of strain off of your business.
You aren’t ready to settle down. Flexibility is by far the greatest benefit to leasing office space over buying. Invariably as any business matures it goes through changes. Whether that means expansion and needing more office space, or downsizing and moving to a shared office. When you lease you are only tied to a property for a defined period of time, allowing the freedom to meet your business needs as they come.
[bctt tweet=”The great debate: buy or lease office space? See which #CRE option fits your business best. “]
Need help finding the perfect office space?
Ok so now you have made your decision, right?! Even if you are still on the fence, you will need help finding the office space best suited to your business needs. It’s a good thing we know a thing or two about office space and have access to all the listings in and around Baton Rouge. We have a great team that likes to work hard and would love to talk to you, contact us today!
About Us – The team at SVN | Graham, Langlois & Legendre has over 99-years of combined experience helping clients across the Baton Rouge market get the most value out of their CRE investment. Contact one of our dedicated CRE professionals today with any questions you may have and start seeing the returns in a market that will make sure to give today, tomorrow and for the extended future. To reach us, you can call us at 225.367.1515 or you can send us a message on our website. You can also follow us on Twitter at @svngll or on Facebook.