Owning vs Renting your commercial premises for your business.

Posted 25 Jan

Owning vs Renting your commercial premises for your business.

As a business owner you may often wonder about whether it is best to lease or own your property. It's a big decision and there is a lot to consider. As it can take many years to pay for itself, owning a building works best if your business is well-established, you have money to invest, and you are taking a long term approach. 

The advantages of owning a commercial property:

• You no longer need to worry about communicating with a landlord. You are the landlord now.  Therefore, your lease will not end suddenly, you get to make all of the decisions about how the premises is used. If you want to make changes to the fit, it’s up to you.

• You do not have to worry about rising rent. Eventually, owning a premises will be cheaper than leasing. When you continue leasing, you can expect the rent to keep going up; sometimes the jump may be substantial.

• If your business moves or closes, you will still own the building. This can be a highly valuable long-term asset, depending upon the type of building and the potential tenants.

The advantages of leasing your business premises:

• Leasing gives you more flexibility. If your business gets too big for the space, you can move, or downsize if more people are working from home.

• You do not have to worry about paying building expenses like rates and insurance.

• Your rent is likely to be lower than the servicing costs for a commercial property loan. This can then boost cashflow, so you have more to invest back into the growth of the business.

• The landlord will take care of any repairs and maintenance on your building – when there is a leak, for example.

• Commercial buildings are typically expensive, and financing is costly, so you will need to do plenty of research before you decide to make a purchase.

We can run a cost-benefit analysis.

Could buying a building be the right choice for your business? We can work with you to analyse the costs and benefits of each option, to help you make an informed decision about which one will put you on track to achieve your goals. 

If you would like further information on how we can assist you with the decision about purchasing a property for your business, get in touch with your WDF team member today on 6921 5444.

WDF Accounting and Advisory | Accountants Wagga | Your partners in business

Providing carefully tailored accounting solutions in business advisory, tax compliance, bookkeeping, Self-Managed Super funds, and more.