Buying or Renting Office Space – Which is Best?

Buying or Renting Office Space – Which is Best?

• 8th September 2016

When it comes to sourcing your office space, there is much debate about whether buying or renting is better in the current climate.

Naturally, whether you’re looking for office space to rent or buy, there are pros and cons to both. Buying is a big commitment and may not be the best solution for your business, so understanding the benefits of both will ensure you make the right decision for your business.

Long term investment

As it stands, the UK economy is currently enjoying low-interest rates, which can make buying an attractive prospect, as you will not only own the property but can gain valuable equity in the process. However, this is a long-term commitment and an expensive one, which may not yield significant equity for some time. Furthermore, should your business circumstances change, requiring expansion or downsizing you face the challenge of selling in order to facilitate this.

Location

When buying, typically businesses are limited to what they can afford, which could potentially force you out of higher-end locations. However, with rental offices, you can afford to rent offices in your desired location as it isn’t such a huge outlay in the initial stages. Therefore the capital saved on buying can be invested in other areas of your business.

Technology

It’s also important to consider the role of technology and remote working that can make the location less significant, meaning businesses can operate from anywhere in the country. However, it’s a good idea to test the process first, and renting office space is a safe and effective way to do it before committing to buying.

Flexibility When Renting Office Space

Both renting and buying office space can give businesses flexibility. For example, if you own your premises, you are essentially the landlord, therefore you have the freedom to source the most cost-effective service maintenance solutions and control to modify your offices to meet your exact requirements. The flip side is that you also have to front the costs and time for maintenance and repairs, which can be more costly for a business than paying a service charge to a landlord. Plus, should your business grow and exceed the capacity of your current premises you will have to also cover the cost and inconvenience of relocating.

By renting office space, there is greater flexibility, as with most leases you pay a monthly/annual service charge that covers all your maintenance costs. Also, you aren’t tied into a long term contract and can easily expand into new office space close by quickly and easily.

While for some businesses buying may be the best course of action, the reality is that for most renting is a much safer solution offering flexibility, good rates, and lower risks. For great office space to rent in Derby, contact RTC Business Park today.