Could Your Business Benefit from Renting vs Owning a Commercial Property?

There are many budgetary decisions you’ll have to make when starting a new business, but one of the most important is the decision to own or rent a commercial property. For many business owners, the question of owning a property seems a little out of reach – and perhaps even superfluous – especially when considering the upfront costs, maintenance responsibilities, and long-term financial commitment that come with ownership. But there are benefits to commercial property ownership that might not immediately meet the eye. We’re going to look into those benefits below, as well as the benefits of renting a commercial property, giving you all the facts needed to make a confident decision.

Top Benefits of Owning a Commercial Property

1. Long-Term Investment

Yes, owning a property is going to be expensive, especially when you consider all the additional costs that come with it. You’re not just going to be spending money on the purchase of the property, of course. You’ll also need to buy commercial property insurance – ensuring its from reputable brands like Next Insurance – giving you protection against numerous potential risks, such as fire, theft, vandalism, or natural disasters. Maintenance will also cost you, as well as property taxes, utilities, and operating costs. But it’s important to note that all of these payments go toward building equity, not just covering someone else’s mortgage.

2. Air of Authority

Owning a property will also give you an air of authority in the business space. When renting a commercial property or working remotely, you may not be projecting the same level of permanence or stability to clients, partners, or investors. Owning a commercial property, however, can enhance your credibility and reputation, signalling that you’re committed for the long haul and are completely financially stable.

3. Control Over Your Space

Another benefit of owning a commercial property is the control you’ll have over the space. If you’re renting an office space, for instance, you’re essentially moving your business to someone else’s property, a property that might not match your style or branding. Owning a space, however, allows you to build a personal business hub, tailoring every aspect of the environment to fit your brand identity and operational needs. From the layout and design to the materials and signage, you’ll have the freedom to create a space that truly reflects your business’s personality and values, and that could be crucial for making a lasting impression on clients and employees.

Top Advantages of Renting a Commercial Property

1. Lower Upfront Costs

Those are three strong reasons to own a commercial property, but there are numerous benefits when it comes to renting too. One of them is the lower upfront costs, which can be particularly helpful if you’re only just starting out in the business landscape. The last thing you want to do is spend a huge amount of your budget on owning a commercial property, only to go out of business in the first few years. Renting allows you to invest in business growth, marketing, staffing, and more, without having to worry about typing up your capital in real estate.

2. Fewer Responsibilities

Renting also means you have fewer responsibilities, which gives you the time to focus on the elements of your business we mentioned above. In most leases, for instance, the landlord handles major building maintenance and structural repairs. Depending on the state, they might also be responsible for the insurance side of things, though you might still want to carry your own tenant’s insurance to protect your assets and liability. Having fewer responsibilities gives you the chance to concentrate on growing your business without the distractions of property management, which could be far more beneficial for your company in the long run.

3. Flexibility for the Future

Lastly, leasing gives you the ability to scale or relocate far more easily as your business evolves. The business you own today, for instance, might be completely different from the business you own in five years. If you’ve been renting office space, you might find that you grow out of it or want to target a new market, and that means you won’t want to be locked up in a long-term investment. That being said, by owning a commercial property, as we mentioned previously, you do have the ability to scale or renovate as you go. So it’s really up to you and what you think makes the most sense for your specific company!