Benefits of Leasing a Business Space
When it comes time to open a physical business, a business owner has two main options: buying or leasing commercial real estate. For most new business owners, leasing is going to be the better option. This is because leasing allows for much more flexibility in many business scenarios.
Change Spaces Easily
Leasing commercial real estate is similar to renting an apartment; the business owner will sign a lease that typically lasts for a couple of years. Once the lease is up, the business owner is free to move the business without facing any penalties. This makes it easy for business owners to switch spaces every few years as their business grows or shrinks.
Buying commercial real estate, on the other hand, is more similar to buying a house with a mortgage. The property will need to be paid off over a decade or longer. This makes it much more difficult and costly for a business owner to move shop. Whether they move during the “mortgage” period or after, he or she will need to sell the property or lease it to another business to be able to afford the move.
Have Fewer Liabilities
Owning a building is a huge responsibility that includes everything from paying the mortgage to insurance payments, and making any necessary repairs. When leasing a property, business owners can avoid paying for building upkeep and repair. This erases the possibility of unexpected building expenses popping up. While business owners might need to pay for insurance if they are leasing a workspace, it is not always required. Business owners need to make sure to check up on state laws and lease agreements to know whether or not they need to pay for insurance.
Get Tax Benefits
Business owners who rent an office space or a similar working space can use the rent as a deduction when it comes time to file taxes. This can save business owners hundreds of dollars on average each tax season. Business owners should talk to an accountant or tax professional to ensure that they are deducting the correct amount from their business taxes.
Leasing commercial real estate is a great option for new business owners who are not yet settled in a spot and who do not know how the business will grow in future years. This will help to save money in the short term, which is exactly what a new business needs to succeed.