Many entrepreneurs and small business owners find it difficult to decide whether to purchase or to take Leasing Office space. Ask a professional broker about your particular situation and he will likely tell you it all depends. There is no one size fits all solution when it comes down to such an important business decision.
If you don’t have enough capital to buy a commercial building, leasing is a good option. Leasing is the best option, but it may not be the most smartest. Statistics show that the majority of new business owners begin by leasing office space. Many business consultants recommend leasing your space until your business grows.
There are some benefits to leasing your business property
- Flexibility. This is one of the many benefits to Leasing Office space. After the lease ends, you can move to another office that suits your needs and your budget.
- Less responsibilities. The landlord or property manager is responsible for security and maintenance.
- Deductible payments. Lease payments can be deducted as operating expenses if the arrangement is true.
- No mortgage. You can free up cash to put where you need it. This is particularly helpful for new owners of businesses.
- Tax credits. A tax credit for investment is a reduction of federal income taxes equal to 10% of the equipment’s cost in the year it is used. Although the tax credit is usually taken by the lessor, the lessor may pass some of the benefits to the lessee through a reduced lease payment.
- Negotiable rates. It may be possible for you to negotiate a lower lease price if there are many real estate properties nearby.
- Less paperwork. Your income tax return for a business that leases office space will be easier than the many forms required by building owners.
- No down payments. Typically, you pay 20-25 percent of the purchase price to put down a deposit and then mortgage the remaining balance. You only need to pay one to two months of the rent value before you can move in when you lease office space. This is a great option for cash-strapped small businesses.