So business is going strong, and now you are beginning to wonder if it’s time to stop pouring all that office rent money into someone else’s pocket rather than investing in office space of your own. After all, commercial mortgage interest rates are still quite low, and your company’s success indicates a bright future ahead. As you consider this important shift in business strategy, here are some things to consider.
- Is now really the time? We ask this question not just with regard to interest rates, but also with regard to your company’s future growth. If your business continues to expand, will you find yourself, in another few years, running out of office space? If you are still in a period of growth, sticking with leasing may be preferable, because it provides more flexibility for future expansion. You should only purchase office space if you are quite certain that your future needs will be met by the space you purchase.
- Where do you want your headquarters? Here we are thinking “bigger picture.” Think beyond whether the area you are considering is a prestigious, or up-and-coming, location for your company’s headquarters. It would be wise to do some research—and we can help—about business trends in your city. You need to think not just about what things are like now, but what they might be like in the future.
- Is the area of town you are considering going to be the right place for your business in twenty, or fifty, years, not just for the next five? Will the area’s infrastructure (roads, bridges, restaurants, etc.) meet your needs in the years to come? If you are counting on some appreciation in the building’s value over time, it’s important to make sure you are buying in an area that will continue to grow.
- Is this a good financial move for you? In addition to paying a mortgage company instead of a landlord, you will need to factor in your upcoming capital needs and cash flow considerations, as well as the tax consequences of making the purchase.
- Are you ready to be your own landlord? This is a very important consideration, because when you lease space, it’s easy to call the landlord if the toilet backs up, or expect that the icy sidewalks will be cleared by the time you show up for work. If you own the property, those responsibilities, and more, will now be yours.
These are just a few of the questions that you should be considering as you discern whether to lease or buy in this market. We have more information on lease vs. buying office space and we suggest you contact us to conncet with on of our local pros to further discuss this exciting possibility.
By: James OsgoodBuying Office Space , Lease vs Buy , Office Space