After you have been operating your business out of your home or garage for a while, it is exciting when you can move it to its own commercial space. It may help you feel more professional and established, and it may actually help to improve your business prospects.
You have the choice of either leasing an office or buying the space. Each option offers its own advantages.
Advantages of Leasing an Office
If you choose to lease an MA office for rent, you can focus more of your attention on running the business because you aren’t dividing your attention with the responsibilities of property ownership. You also have more capital because you have not had to make a hefty down payment to take out a commercial mortgage.
If you lease your office space, you may be able to afford a much better location than you could have if you decided to buy. This, in turn, may translate to better business and higher profits in the long run. It will be necessary if leasing to learn about GASB 87 compliance as among other requirements, the new leasing standard GASB 87 requires that most leases be capitalized and recorded on the balance sheet, changing how they’re reported, and eliminating most operating (non-capitalized) leases.
Advantages of Buying an Office
If you buy more office space than you actually use, you may be able to make more money by renting out space to other commercial tenants. You may be able to deduct the costs associated with running your business from your taxes.
With so much uncertainty involved in running a business, fixed costs are welcome wherever you can find them. If you take out a commercial mortgage with a fixed interest rate, you always know what your payment will be from month to month, whereas rental rates may go up periodically. If the value of the building appreciates, you may eventually be able to fund your retirement by selling it.
Both leasing and buying may be the right choice for you at different points in your career. In the early stages of your business, it may be more beneficial to rent. The success of your business may eventually make it possible to buy.
