Business owners faced with the decision of leasing versus building an office take a variety of factors into consideration in order to make the best long-term choice. While leasing offers quick-start solutions, commercial construction provides long-term benefits. Here are some facts to consider while weighing the pros and cons of leasing vs. building the right location for your business.
Pros of building an office facility for your business
Personalized design details
The great thing about hiring a commercial contractor is that they work together with you to develop a winning design and construction plan that suits your vision and plans for future growth. You can customize your workspace to your specifications and your unique business needs.
Desired location long-term
When you complete a commercial construction project, you can stay in your location for the length of time you choose. No one will ask you to move.
The tax deductions associated with owning a commercial office building benefit your business. Mortgage interest, property tax, and depreciation deductions provide incentives to build an office.
Unlike rental properties, there are no random increases in your monthly loan payment. The stability of fixed costs for the duration of your mortgage loan builds in clear predictability for your monthly cash flow.
Investing in building office space opens opportunities to add another revenue stream through renting a portion of your office to another business.
The beauty of building your office space lies in the stability of a wise long-term investment. Equity builds monthly and puts you into a better position to expand your business.
No need for a landlord
Building your own office space means you no longer have to deal with a landlord or wait to have things fixed on their timetable. When something breaks, you can get it fixed promptly.
Cons of building office space
It costs more upfront to build your office facility. Before building, the financial impact of your down payment, appraisal, and mortgage payment should be thoroughly considered.
When you own the building, you pay to fix it.
Long-term needs can change
Unexpected situations could put you into a position where you need to sell the property.
Pros of leasing office space
Time to focus on growing your business
It takes time to plan and build an office facility. Leasing office space frees up your time to simply do what you do best — grow your business.
Keep your capital freed up so you have options
When your capital isn’t tied up in building an office facility, you have the option to utilize it elsewhere.
If your business requires a specific location and nothing is for sale in that area, it may be advantageous to lease space for a period of time instead of buying it.
Buy time to find the best place to build
If you desire to build and you simply can’t find the right lot or location, it may be good to consider leasing office space until everything is in order to begin your commercial construction project.
No maintenance responsibilities
Most office space leases leave the responsibility to maintain the building with the landlord. Roof repairs, air conditioner and heating units as well as minor maintenance needs will all be taken care of for you.
Cons of leasing office space
As far as equity and its benefits, you miss out when you lease. There’s nothing to show for the lease payment you make monthly.
Random cost increases
Leasing prices can increase while you are in the building, so realize you don’t get the benefit of fixed monthly payments while leasing commercial office space.
The final decision to build or lease depends on your financial, tax, and business needs. Once you secure your new space, personalize it, make use of the natural light within it, and furnish it in such a way that creativity and productivity are sparked by just being there.
Commercial Construction, Design, and Remodeling in Tulsa
Construction by Daniels is a professional general contractor specializing in commercial construction services including new building construction, additions, and remodeling projects. With excellence and commitment to quality, detail, and service, they complete projects within budget and on time. Contact Construction by Daniels today at (918) 872-6006 to discuss the best options for your business.