Singapore
Singapore
Depending on the nature of your business, the location of your office may or may not be an important factor in your operations.
But one thing for certain is that the cost required for your office cannot be ignored, as it usually forms one of the biggest components of your monthly overheads.
So should you buy or rent office space for your business? The answer to this question can differ depending on various scenarios, but we have some tips to help make your choice of buying or renting a simpler one.
Being able to accurately predict how long your business will stay in the same location is impossible given the many factors involved.
With that said, if your business is still in its infancy and you are not sure if it will last in the long term (at least at the same location), then renting office space instead of purchasing it makes better sense.
Similarly, renting is a better option if there is a likelihood that you might sell off your business at a later stage or your business will outgrow the space you currently have.
In short, renting not only saves you money but also saves you time and convenience when it is time to move.
Another point to consider when buying or renting office space is the size and amount of office equipment you have — as this directly impacts the amount of space you need.
For those who own bulky equipment (and unless real estate prices are rock bottom), putting off purchasing office space for the time being might be the wiser choice.
However, if you are in the process of upgrading your office equipment to more affordable and space-efficient ones, like the Canon DR-C125 document scanner or imageCLASS MF4580dw laser all-in-one printer, the savings you make in both space and money can make it possible for you to purchase a small office space of your own.
Here is where having a business plan comes in handy – along with a bit of optimism. Although attempting to gauge how quickly and how much your business will grow in the near future can be tricky, you should have a rough idea of what to expect in the next five years.
Being unable to estimate (with reasonable certainty) how big your business will grow in the short-run is a good sign that renting could be a better move. This will help you avoid buying a space that is too large and expensive, or too small that your business will outgrow it within a short time.
One advantage of purchasing your own office space is that it automatically gives you a second business: real estate investing. By owning property located in an area of appreciating land value, it gives you the opportunity to sell it for a decent profit in the future.
In addition, if the space you bought turns out to be more than what you actually require for your business, you could rent out the additional space as an extra source of income.
But while property ownership does have its perks, don’t rush out to buy office space just yet. You should find out more information such as: Are property prices at an all-time high now? Will I be able to sustain the property should my business fail? Would the space be easy to resell?
Although there are no hard and fast rules as to when is the ideal time to buy (or rent) office space, having a good idea of your business needs and how it will grow in time definitely helps.
If you have already established this, and have a good grasp of the type of space that suits you, then don’t rule out the possibility of buying if property prices are attractive.
However, if the future seems uncertain and you are weary about making a large upfront investment, then opting for the flexibility of renting might be a safer bet.