The Pros and Cons of Buying Commercial Office Space
If your business is growing, buying your own office will give you complete control over how your business. It will also give you that all-important asset that can be used against future secured lending financial deals. There are other advantages, including:
- You also don’t have the restrictions of a tenancy agreement to stop you from remodelling or upgrading your office
- If you buy a property in an ‘up and coming’ area, that asset will quickly increase in value. If you decide to sell the building, the return could be considerable.
- You can rent out your property if your business outgrows the office space or your business model changes. The extra income it generates can then be put back into your business.
However, there are some provisos:
- If you buy space in a shared building, you may be restricted as to what you can do with that office. There may also be additional costs, such as building maintenance costs.
- That initial investment will be considerable. Is your business in a position to finance such a significant capital investment, or will it leave your bottom line depleted?
If your predictions are good and you’re confident that the business will expand, the risk may be worthwhile.
What About Leaseholds?
Leaseholds are generally cheaper than freehold purchases, but they only run for a fixed time. Once the lease is up, you’ll need to renegotiate an extension or vacate the premises. That’s a considerable risk to take, especially for young businesses. And while the initial capital investment is lower, the costs can mount up when it comes around to renegotiating the new lease.
Subletting – Becoming a Landlord
Buying your own office space does give you the option of subletting. However, as a landlord, you’ll be taking on a whole new raft of responsibilities that could constrain your business ambitions. Do you want to run your business or be a landlord? While the two are not mutually exclusive, they can be challenging to combine.
OGR Stock Denton’s property law specialists will be able to provide you with the advice you need if you’re thinking about subletting.
Why Buy When You Can Rent?
With all of these potential issues, you may wonder why buy when you can rent? Buying gives you:
- Greater flexibility
- The chance to earn extra income by letting the office space out to a tenant
- A solid business asset that can act as a guarantee against secured loans
- Client confidence – a business that owns its own office will be seen as stable, reliable and trustworthy
However, renting gives you:
- Lower initial capital investment
- The opportunity to move into more appropriate premises as the business grows or changes
- The opportunity to take advantage of special deals such as rent-free periods, especially in regeneration areas
- The chance to renegotiate rental agreements
Office Property Services From OGR Stock Denton
With a wealth of experience in commercial property sales, OGR Stock Denton is your go-to team for legal services. Whether you’re buying or renting, our solicitors are here to help you navigate your way through the negotiations, contract agreements and conveyancing.
Our experienced team is constantly expanding their skills through continual personal development and best-practice to bring you a comprehensive service from initial inquiry to completion.
If you’re thinking about buying offices either as an investment or to help your business grow, our office solicitors will provide you with jargon-free, no-nonsense legal services. Call us today on 020 8346 0321. Or use our online contact form to get in touch, and our team will get back to you.