Lease Or Buy Commercial? Which is better?

One of the biggest costs when starting a business, usually the purchase or rental of the premises for its operation.

The decision to buy or lease the premises for a business depends on several factors, but definitely, the main factor is capital or financing available.

Before making this decision we take calculated what the total investment in the business, whether on stage where they buy local, as in the rent only. Then we calculate the projection of future revenues and expenditures, and, accordingly, consider whether we would be able to pay monthly debt incurred as a result of the purchase of the premises, or if we would only be able to pay the rent.

The usual practice in the case of a single entrepreneur or a small business is that buying local is out of reach.

If we choose to apply for a loan for the purchase of premises, unless we have a good line of credit, it is usual that the bank asks us to put at least 25% of the total required.

However, the monthly payment of a rental is usually one of the biggest costs in a business, so ideally a local purchase. It is also good to consider seat rentals fort bonifacio if you’re planning to rent an office space.

If we can get adequate funding for it, we would have the advantage of owning a tangible asset which could be taken as a long term investment, and sell at any time, for example, in the event that the business does not work. Also we would have the advantage of having more control over the premises, for example, to make all the renovations we want.

If however, if we are not in the ability to get financing to buy a local, the other alternative is to rent one, then only we would focus on getting the funding to remodel and equip. Seat rentals fort bonifacio is a good option.

The rent space allows us to substantially reduce investment, and in the case of business failure, also reduce losses. In other words, we can minimize the investment and risk. With seat rentals fort bonifacio, as tenants, you don’t have to worry about the maintenance of the equipments you’re going to use since, the company will be the one take care of it.

Although the disadvantages of renting space as mentioned above, involve paying constant and permanently high amount for rent, plus the possibility of having to answer for the entire period for which the lease, in the case we decide to close the business before.

If, for example, the store is rented for three years, and the business fails in the first, we have to pay for the missing months anyway, get a third for subarrendarle the premises, or to persuade the owner to allow us to terminate the contract.

Although this can be avoided when drafting the lease premises , where we must ensure that the terms or clauses are favorable, not only to the owner of the premises, but also for us.