Wednesday, August 04, 2010

Renting or Buying?

Office building in Warsaw, Poland.Image via Wikipedia

The New York Times has a blog done by a business owner that talks about the decision of whether to rent or buy a building.

While buying worked for this particular person, each business owner must look at his own needs and decide what is the best option for you.

Once thing you need to consider is expansion. If you own your own building and your business out grows the location, will you have move to a new location, or will you have the room to expand your business at the place you own.

If you own the complex and need to move, you have the complications of not only moving the business but finding a new place to buy and selling your existing facility. On the other hand you may be able to expand your existing location but at what cost? what disruption your business? and will the current zoning laws allow for it?

On the other hand if your renting you need to know what restrictions you have on using the building, what improvements or changes you can make, if you have a purchase option (often more expensive than buying direct), and what expenses you are responsible. I would also find out what other tenants think of the landlord and how they take care of the property.

You will also want to do a cost benefit analysis of each option and see which one will work out for you in the long run. Like anything when it comes to running a business, it does not come easy and there is some difficult questions to answer before you make any move.
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