Should you Rent or Buy office space?
The UK has been ranked as the most entrepreneurial country in Europe, with office space providing the ideal place to start and grow your business. But, it can become confusing when deciding whether to rent or buy office space. Finding the right space can be highly competitive, with more offices offering including utilities and dynamic shared work space. Here we loook at both options.
Renting and buying pros and cons
The pros of Buying Office space
Offers clear, fixed Costs long term, great for long term projections.
Owning and running a commercial office space can provide tax deductions.
Dependant on size you could sublet the building to increase income.
The Cons of Buying Office Space
There is a lack of flexibility. For new or expanding business a fixed asset such as commercial office space can add financial pressure.
Initial costs can be expensive when purchasing, such as deposit and improvement costs.
The Pros of Renting Office Space
Renting a commercial property gives a new or growing business the chance to rent in a location and building that you might not be able to buy. This can help with company image to customers and clients.
This can also be a more affordable option with less up-front fees. Any maintenance would be the responsibility of the landlord, helping to reduce unplanned additional costs. It reduces the stress of ownership, leaving you more time to develop and grow your business.
Also, renting office space frees up capital, allowing your business to respond to changes and opportunities in the market.
The Cons of Renting Office Space
With renting you could be subject to annual rent increases, and higher costs when your lease expires.
With renting you are not increasing your equity possibilities when purchasing, and any increase in building value would benefit the landlord.
Ultimately the decision is largely based on where your business is currently and where you would like it to be in the future. Looking at costs, and expansion, does your business have the affordability to invest in purchasing or could that money be better spent investing in the future.
Renting offers a huge amount of flexibility and can help give your business a leg up in the initial stages.
Find out why our Norwich office space is so popular.