Many people believe renting office space is a waste of money. After all, those who rent office space are essentially pouring money down the drain. Conventional wisdom suggests that owning office space is a much better idea because it is an investment. However, there are several reasons why it is better to rent office space as opposed to buying it.
Office Space Affordability
The majority of small companies have no other option but to rent office space, especially if their headquarters is in a city. Sure, you could buy property far from town for peanuts but a number of other overheads will manifest themselves. When you rent office space in a city, you are right at the heart of the action. For small and medium-sized businesses, which makes more sense; Rent office space at a rate you can afford or buy property for $400,000 or more ? Even the down payment on the purchase of property could cost the equivalent of several years’ worth of rent. Allow your business to grow before splashing the cash.
Office Size Matters
Fledging companies simply must choose to rent office space because they have no idea how large they will grow. What if you purchase property only to find that your operation outgrows it within a few years? Usually, a company that gets bigger has no financial problems but this is not always the case. It is easy to move when you rent office space, not so when the property is all yours. You have to decide what to do with it. For example, you may elect to sell it (at a loss in today’s market) or lease it to someone else.
If you rent office space, your rent is often tax deductible. If you have to make repairs to leased property, you can also write it off. Things get far more complicated when you own your own building. Generally, depreciation on commercial buildings is set over 39 years which means you can only write off around 2.5% a year and the size of the down payment is irrelevant in this instance.
If your organization is small and you are unsure of its development potential, you must rent office space. Owning property has its advantages but it also carries many responsibilities and this is often too much for small businesses to handle at the outset.
Founded in 1970, World-Wide Business Centres is located in over 60,000 square feet of prime Manhattan office space on the 8th, 9th and 10th floors of 575 Madison Avenue.
WWBC is home to three floors of executive offices andconference rooms, all furnished and tastefully decorated complete with telephones and internet connections ready to go. Beautiful appointed reception areas are the focal point for the arrival of all visitors.
Contact us today to book a tour!