It can be a big decision whether you buy or rent your business location. Here are some reasons to go either way.
The decision to rent or buy the space where you operate your business is a lot like the decision to rent or buy your home – there are benefits to both, and it’s ultimately up to you which option’s best.
- Long-term saving – It’s going to take a few years, but eventually you’ll save a lot of money by buying your business location. If your location’s perfect and you know you’ll be there for the long haul, buying it’s a good bet.
- It’s an asset – When you own it, it becomes a very valuable asset and, if you ever need a loan, you can use it as collateral.
- Control – There’s no worry that your rent will go up because of a new lease agreement. There’s no one to ask for permission if you’re thinking about making upgrades or changes. You’ll never need to worry that you’ll be forced to relocate if your landlord decides to do something different with the property. When you own your location, you make the decisions.
- Short-term saving – A 25% down payment plus closing costs can be a big pile of money, especially if you’re just starting out. If you’re in the early stages of your business, renting may be the most affordable option.
- Uncertainty – Any new business venture comes with some uncertainty. Planning and projections give you a sense of where your business is going, but plans and reality don’t always line up. If business booms, you might quickly find your location’s too small. If things are a little slow at the outset, money not spent on real estate could help keep you going, do some advertising or take a change in direction.
- Focus on your business – If you can land a lease agreement where your landlord’s responsible for your building maintenance, that’s going to leave you with more time and money to focus on your business. Owning your own business is a bit like juggling: You have a lot of different things to keep up in the air at once, and taking care of your building just adds another one.
If you’re thinking about a commercial mortgage and you have questions, call our Contact Centre at 1.866.863.6237.