If you want to grow your business, there are certain things you need to do. One of them is obtaining building space. Whether you need office space, a store front or a factory floor, you need a physical building to accomplish that. One of the best ways to obtain building space for your business is by leasing. Below are a few reason why leasing a building can help your business.
1. Leasing Allows You to More Easily Change Course in the Future
Everyone hopes that their new business will be an explosive success with assured rapid expansion after the first year. However, this is sadly not always the case. Almost 80 percent of new businesses go out of business. If your business proves unprofitable, it’s certainly easier to end a lease than it is to get out of a mortgage.
However, this may also be advantageous if you do find resounding success as a business. You may find that the building space you’re renting is not enough to meet your needs after you’ve really taken off and demand for your products and services turns out to be much greater than you had first anticipated. At that point, you may need to move to a larger building or a better location. Having a lease as opposed to a mortgage makes that easier.
2. A Lease Does Not Require a Big Upfront Investment
There are also other ways that leasing may be preferable to buying your business building space. For one, you do not need to make a down payment to obtain a lease. With a mortgage, on the other hand, you usually need to put down 20 percent of the property price to get a loan with a decent monthly mortgage payment and interest rate.
Due to how expensive commercial property is, the down payment may be more than you can afford. Even if you can afford it, there might be a big opportunity cost. The funds may be better spent on equipment, advertising or other things your business needs.
3. You Don’t Always Have to Worry About Maintenance
According to Hartman Income REIT, leasing experts, one of the possible benefits of leasing building space is that often many of the maintenance tasks regarding taking care of the structure itself are handled completely by the landlord. It is very important to know if this is true for your lease, as this is not true for every lease. A lease may require a certain amount of maintenance or upkeep from you based on the contract. If you own the space, however, that responsibility is yours. Not always having to worry about such things can mean having more time and resources to focus on the business itself.
Overall, there are many benefits to leasing building space for a business. Consider the pluses and minuses, and try to come to an informed decision. Leasing may be a better option than buying under many different circumstances.