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When is the right time to buy your office instead of leasing it?

By in Real Estate 101 with 0 Comments Published: 7:37 am, January 7, 2019

Have you ever had or heard a debate between leasing an office or residential space? The argument is usually “which is better” than the other and people will always have varying expectations and opinions about it. But more importantly, when should you buy your own office?


When you have a small business, growth is always the goal, not just for the money but for the business itself. A lot of small business owners will argue that owning your office or building is a good indication of growth in your business but how do you know when you’re ready?



When you lease your office space, you pay for the monthly rental as a part of your monthly expenses. Maybe sometimes this makes you feel like you’re throwing away your hard earned money because unlike when you own your office space or building, your money goes to other people’s pockets instead of yours. Yes, buying your office space or building means that you will still pay for the monthly fee but at least at the end of the loan term, it would eventually be owned you. Doesn’t that sound and feel so much better?

Before jumping on to buying a property, you first have to weigh the pros and cons and see what works for you and your business. Not all businesses are the same and each type might have different demands and things to offer. Before we answer the main question, let’s discuss a few things. Here are some of the things to consider.


Renting an Office

Renting an office isn’t all that bad. Although it feels like you’re throwing away your money, it can have positive things to offer too. Like having more freedom and flexibility when it comes to relocating or spending your income. If you’re renting your space, you are not getting tied up in a place. This could be good for you if the intention is not to stay in that office or location at all.


Prime Location

When looking for a space, whether you’re thinking of buying or renting, regardless if it’s for a commercial and office space or a residential property, location is and will always be very important. This is most especially true if you’re looking for a space your startup business.

The success of some businesses like retail or restaurants can be highly dependent on the area where you’ll put it up. And so, if this is the case, you’ll have to seek out prime locations which means that it can be pretty expensive if you were to buy it. It’s the upfront cost that’s usually heavy, especially if you’re only starting up so decide wisely.

You also have to consider the image of the space because even if you own the building, if it doesn’t match with a certain type of business that you’re putting up, then it will take some time and effort to renovate and decorate the space accordingly. Otherwise, it won’t be a successful business. Renting will give you the liberty of choosing where to put up your business and choosing a space that’s already close to what your business needs aesthetically. And since it’s a rental, you can choose the perfect space without having to shell out huge money upfront.


Time and Focus

Renting your office space or building gives you time. Time to save enough money for expanding or growing your business. This way, when you’re ready, you can eventually buy your own building or space. Time to grow, not just your business but you, as an entrepreneur, who learns a thing or two about business or location strategy and other things. Time to seek out the perfect place or building to buy for when you’re ready to stay put and pay for it.

It will also give you a chance to focus on perfecting your craft. Something that will help your business success and income. Something that will help you in gaining back your capital while you strategically grow and place your income where needed. You also get to focus on your other small investments or small business because you’re not pinned down.

When you purchase a property or commercial space before you’re ready, you can get tied up so no need to rush. Renting gives you time and a chance to focus on the more important things instead of drowning in debts when you earn just enough to pay for the expenses.



Getting tied up with paying your mortgage can either serve as a motivation to work harder or unnecessary pressure to you. When you know you have a goal that you’re trying to achieve, it’s normal to get overwhelmed. But don’t let this get to you. Because having a goal also means that you’re gonna hustle harder. It helps you stay focused and driven so all the hard work won’t get wasted.

Be sure to weigh your expenses vs your income first to see if you can actually afford to buy your space because if you’re not yet on that level then renting is definitely a better option. Not only is it easier to let go when need be and the pressure won’t be as much.


Buying an Office

Although renting has good things to offer, buying your own office space can have pros too! Like being your own boss. Okay, you’re your own business boss but wouldn’t it be nice to be your own boss when it comes to your space? Like having freedom to renovate and expand at any time. Alao, owning a property that you can rent out or make more money out of eventually is pretty sweet.



The cost of buying an office may either be the same or more expensive as when you lease your office space or building. This depends on your location and the type of space you’re eying for. Naturally, newer and more in demand locations are more expensive than older spaces. But the good thing is that the cost of your commercial space mortgage is fixed once you lock in with buying it.

Once you lock in on buying your office space or buying your building, it doesn’t change like when you’re renting. When you’re renting, the landlord can increase the rental or fee depending on your agreement. Because of this, you can now plan your expenses or budget accordingly in the years to come without worrying about the rent getting raised or the contract of lease expiring.

Sure, at first, you’ll have to make a big down payment and spend more to develop or renovate your office, especially if you’re buying a building but in the long run, if done correctly, you’ll see the return of investment is worth it. It’s usually the upfront cost that you have to save up or prepare for. After that, you can focus on the business itself.



Some will argue that this isn’t entirely a good thing because you won’t be able to move or transfer location at a whim as compared to when you’re renting your building but if you’re already an established business in your space or area, then this wouldn’t be a concern at all. In fact, this would actually work to your advantage.

The good thing about owning your space is that you won’t have to move around when your lease is up and the owner doesn’t want to renew your contract. Your loyal customers will always be able to find you decades later even if you’ve changed your contact number which is always good for businesses because people will always know where to find you. No need to forward the change of address or make announcements to your customers, worrying if you’ll lose a lot of them when you move your office because you’ll always be there in the same spot.



Renovations, expansions, and redecorating will often be an issue when you’re renting. You’ll need to ask permission for everything like painting your walls or drilling things. Most of the time, you’ll need to secure permits and other things if you’re renting in a building which can cost you time and money. You wouldn’t have to do this when you own your office or building. You can just do as you please.

You can always expand or grow your business as much as you want but when you don’t own the property or office, this can get a bit delayed or sometimes hindered if your plan doesn’t go according to the rules.

You are your own boss. No need to ask the landlord for permission to renovate and expand because you are your own landlord. You have the freedom to demolish, expand, rent out a part of it and do whatever you please because you own it.


Extra Income

As mentioned earlier, when you buy your office building or unit, you can rent out the extra space to other businesses, even before fully owning it. In fact, you can even create more space so you can rent it out eventually. You can make a business out of it to other small businesses just like how people rent out their condo units. This is another strategy businessmen takes advantage of. You might just be able to cover your monthly payment through the rental of your extra spaces and earn more to support your other needs.


Retirement Backup

Aside from eventually being able to rent it out in the future, properties, especially commercial spaces appreciate over time. It can either serve as a continuous income so you can fund your retirement or you can sell out eventually.


Next Generation

Although properties usually live or is advised to only have the lifespan of 50 years, with the proper maintenance and care, it can last longer. You can now hand it down to your heirs. Your kids or grandkids in which, you’re also in a way, securing their future. Being financially stable is one thing but having assets can get them ahead.

It’s always exciting to buy your first office. Even if you’ve saved up more than enough money, you still have to think about it a lot of times over because it’s pretty much a long term commitment. It’s not something you can just quit the next day.


When do you know when you’re ready to purchase your own office or commercial space? Aside from the money, you have to consider what you value and what your business needs. If you prefer flexibility over ownership then renting might be ideal for you. If you want something to use as backup for when you’re older then investing in your own office or commercial space might be ideal especially if you’re in it for the long run. At the end of the day, weighing the pros and cons of both renting and owning will help you make the best decision for your business. It’s not enough to have money, it’s also very important to be wise.

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