New business owners have an overwhelming number of decisions to make. Chief among them is the question of whether they should lease or purchase their commercial space. In order to answer this question, you should consider your priorities regarding how soon you want to open, your finances and possibilities for future growth.

Speed of Opening Your Business

One advantage of leasing property is that the rental process tends to be much faster than the process of buying. If you would like to get your business up and running as soon as possible, then you can often begin renting in just a matter of days. There are more properties available for rent, so with more options to choose from you might be able to find something you like more quickly. You can also usually rent without submitting a credit report or taking out a loan, so you do not have spend time waiting on banks. 

Costs 

When you rent a commercial space, you do not have to place a down payment. You may have to pay a deposit, but that should be significantly smaller fee. This saves you some money in the early stages of your business, and you can put that money towards other costs associated with opening. You can also write off your lease payments as business expenses and earn tax credits. Another perk is that if maintenance fees are included in your rental agreement, then you will not have to budget for unexpected maintenance expenses.

However, there are some downsides to renting. When you lease a space, you do not gain equity with your payments over time. Your rent may also increase beyond your control over the years. If you purchase a property, you do gain equity and your payments will stay the same from month to month. If you are willing to save longer for a down payment and would like your payments to go towards eventual ownership, you might consider purchasing instead of leasing.

Expansion Potential

A final factor to consider is how you envision your company growing over time. For example, five years from now you may find that your commercial space is no longer meeting your needs. If you are leasing the space, your options are to relocate, request that the landlord make changes to the space or make do with the space you have. If you own the space, you can do renovations without having to wait for approval from the landlord.

All of these decisions depend on your priorities and visions for your company. What works well for one type of business might not work for another. It is important to be thorough and consider the needs of your new company, so you can make a decision that ensures a prosperous future.