When establishing a company, location, storage and operating space are among the most important considerations. If you are not a freelance service provider whose workstation is always the customer's location, you definitely need an operational basis for your company. Even for those who run their businesses from home, they have reached a point where they need to expand, and the free space or small space in your basement is no longer enough to hold your business inventory, tools, and materials.
When you run a workshop, expanding your business means more equipment, more materials, etc. You also need more space to cover a larger customer base. As you expand to offer customers finished products and services beyond your region, you may also need to set up branch offices in the new locations. But the big question is: which is more advisable between renting and buying a workshop or an operating room? The best answer to this is that it depends on several factors. This article provides some pointers to help you decide whether to buy or rent a workshop.
What is the type and size of your company?
This is one of the most important factors to consider before making a decision. The type and size of your company largely determine which option between renting and buying is best suited. This is because different types of companies have different demands on the workshop, which is basically your area of work, and this makes it even more confusing to make a decision. When deciding whether to buy or lease workshop space, you should contact a reputable commercial real estate agency that deals with both renting and selling real estate in your area of interest. This way, you have a variety of options to choose from, and experts will guide you based on your company's needs so you can make an informed decision. The facility you receive should fit your company in terms of space, comfort and the type of work for which the premises are used.
The site
As mentioned earlier, the location can have a big impact on the growth and success of your business. If you want to work faster, renting can be a good option. In fact, commercial real estate for sale in certain locations, particularly in city centers, is difficult to come by. You can quickly move into a rental property and start up your business. On the other hand, buying a workshop can be ideal if you are not in a hurry and are looking for a long-term solution that will help build credibility and build a good reputation for your business.
Your Büdget
This is almost obvious. As an entrepreneur, buying or renting a workshop is basically an expense that affects your working capital or profit margin. To buy a house, you need to spit out more money in advance, either in cash or on a mortgage, for which you still need to raise a mortgage deposit of around 40% of the full price. Still, it can be more beneficial in the long run as this is an asset your company will own. While you may have to make monthly payments when buying with a mortgage, this will reach a point where the company owns the property entirely.
This is different from renting, where you have to pay rent every month throughout the life of the company, whether you made a profit or not. In addition, the rent increases over time, in some cases after each lease. Still, your immediate budget determines the best option for you. If you don't have enough capital to buy or your credit isn't too impressive, you can always start renting and buy later.
maintenance
To add something about the cost, renting seems to be more convenient in terms of maintenance. Mostly the landlord is responsible for the maintenance and even repair of some parts of the rental property. However, if you buy a workshop, all maintenance is your responsibility. To do this, you need to allocate a budget.
Your future plans and your value
There comes a time when things go south and you feel like you are out of business. What happens to the workshop you bought in this case? What if it is too small and can no longer meet your business needs? Well, you can sell it at any time or sublet it for revenue, but it takes time and costs. On the other hand, renting gives you more flexibility when moving out or closing the business. On the other hand, the property you buy offers you the convenience and freedom to adapt your space to your business requirements without restrictions. By buying a workshop, you can add value to your company, since real estate in most cases increases in value. It can also bring you more tax deductions compared to renting.
Choosing between renting and buying a workshop can be a daunting task. It requires research, patience, strategy and careful thinking. Fortunately, the tips above can help you avoid the headaches associated with difficult decisions like this.
