Small Business Property: Purchase versus Rent – Part 1 ‘Renting’
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There are many questions and quandaries facing the smaller business when it comes to commercial property and office space.
Should a smaller business rent or purchase? Is it wise to downsize and introduce hot-desking or home working to reduce square footage? Will it be cheaper to move out of town in order to take advantage of lower rent costs and better parking/access? Is now the time to buy land for sale or is it better to rent and wait? Does a serviced office really make working life easier or cheaper?
No matter what the decision to be made, the important point to remember is that the recession is temporary. The situation will change and businesses need to think and plan long-term.
Flexibility is the key and, at a time when commercial property developers and agents are under pressure, there are many opportunities available that offer low commitment property solutions in a climate of uncertainty.
Firstly you need to decide whether you are building a business or an asset. At what stage are you at with your business?
If you’re building your business and cautious of the current climate, your first priority is to manage your costs and cash flow. Renting will allow you to do that and control your resources providing you manage the agreement correctly from the outset. Find out how frequently rates are reviewed, what you can expect from maintenance and be sure of everything included -and not included - in the rental payment.
Rental is typically fixed and more predictable than interest rates on purchased properties. Whilst it has to be said that your rent is paying for someone else’s asset, it does give you the security of not having to deal with property management and unexpected costs when problems arise.
When making the decision on location, don’t naturally assume that city centre locations are the best option. Shop around and compare out of town office rent to centre rates. When analysing costs, consider the impact of travel, parking, competitor proximity, amenities and your flexibility to expand or downsize. Do staff have to pay to park, is it hard sometimes to get a space with all the time wasted that is involved needing to be taken into account. City centre costs aren’t the only downside, it can often be a hassle doing business there impeding your business efficiency.
Keep your options and mind open if you don’t have the capital available for purchase. Renting will allow you to focus on other more important areas of your business during a recession.
Visit www.liscombepark.co.ukfor easy lease, get in/get on flexi rent for businesses looking to expand or downsize in the Milton Keynes, Aylesbury, Leighton Buzzard and Luton areas.
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