When making a decision about office space, enough information needs to be obtained as well as the right tools to help find the best option that can help increase the profitability of a business. This is true for whether the company is a new start-up or a long-existing one. Although there are certain techniques and strategies that can be used, knowing the pros and cons of leasing a Dallas commercial office space will help determine the best avenue for a business to pursue.
Leasing Pros and Cons
Finding a prime piece of property is one of the main reasons many business owners choose to lease a work places. Renting provides a great opportunity for companies to find a good location with a respectable reputation. Small businesses, such as restaurants or retail stores, whose revenues are dependent upon location and image, often choose this option over purchasing property as renting is much more affordable.
Another good reason to rent is to free working capital so that a company’s money is not tied up in real estate. It gives a business the ability to respond and participate in great market opportunities in the future as well as a better opportunity to borrow money than if there were a large monthly mortgage payment. Renting allows a company to focus all energy on running the business, rather than managing a large commercial property.
There are at least two disadvantages that come with leasing. The first one is the variable costs that come with renting. There are yearly increases in rent that can translate into paying significantly more money in rental costs by the time the lease is concluded. Second, leasing does not allow a business to accumulate any equity against the property because the payments made every month are simply an incurred expense of the company.
Buying Pros and Cons
When a business decides to buy a building, certain benefits can be enjoyed such as a fixed cost, tax deductions, additional income and even a source for additional income. Locking into a long-term mortgage at a good interest rate allows a company to clearly determine what building expense will be every year. Owning and running a Dallas commercial office space provides tax deductions for property taxes, mortgage interest, and other allowable items.
Purchasing a large commercial building may also be advantageous for a company since it offers the opportunity to lease out extra space and make additional income. When the property is located in an area where buildings normally increase in value, it can allow for a very profitable sale of the property at some future time.
A disadvantage to owning this type of property is the lack the flexibility needed for new or growing businesses as owning expenses are typically greater than leasing expenses. Another drawback to buying property is the very high initial up-front cost, as money is needed for an appraisal, down payment, property improvements and maintenance.
Once needs have been evaluated and the pros and cons of leasing versus buying weighted against each other, the search can then begin for the best Dallas commercial office space to help a business grow and increase profitability. Adequate knowledge regarding commercial real estate is vital when making this important decision as to whether leasing is the best option for a company. So the answer to the question of whether leasing is all right is a definitive ‘yes!’ if all options and recourses have been recognized!