When you need business premises to set up or continue your business, you are automatically faced with the decision whether you choose to buy or rent. Buying and renting also have their own advantages and disadvantages in a commercial property, which you must carefully weigh against each other. This article provides insight into what is involved when purchasing or renting a commercial property, so that you can determine which strategy suits you and your company best.
When do you choose to buy a commercial property?
Buying a business property is a form of investing. When the property increases in value, you work on building up capital. Buying a business property is an investment. Just like when buying your own house, where the situation is not that much different. Here too, at the end of the term you will have a business premises that is actually yours. Buying commercial property is often cheaper than renting. The monthly costs of a business mortgage, just like a private mortgage, are often lower than what you would pay in rent on a business basis on a monthly basis. A third advantage is that you can depreciate a commercial property. This is only possible up to a maximum of half the WOZ value of the property in question.
When do you choose to rent a business premises?
If you do not have the resources or the business loan to purchase immediately, you may be bound to renting commercial property in the short term. You do not have to take the costs of maintenance into account. If you want to expand later and therefore only want to operate from a specific business premises for a short period of time, renting is more interesting than buying. Renting can also be interesting when real estate prices are high. If you want to incur few investment costs, you can even opt for a fully furnished (turn-key) office. If you plan to use a property for a longer period of time, buying is generally always more interesting than renting. Because you are making an investment in the future. If your business financing allows it, a business mortgage is worth considering.
Buying a business property or a property for private purposes?
For the sake of completeness, it is also good to mention that buying a property privately is also an option. You can then rent it out to your own company and use that rent to finance your repayment. The credit scope that you receive as a private individual and as a business entrepreneur can differ considerably and the option described here is therefore not available to everyone. You can also do the opposite of the scenario described above and buy a larger commercial property than is actually necessary for your business operations at the moment. You can then rent out square meters to other companies, so that you generate additional income from rental.
Financing commercial property: Do you choose to buy or would you rather rent?
It is advisable to think carefully before making a final choice between renting or buying. First think carefully about what type of property you need and where it should be located. Next, consider whether you have plans for growth in the near future or not. Once you have a better sense of your specific needs, you can start looking for options to buy or rent. How much credit space do you get for business? Do you have additional private options to finance a property? Would you rather keep your investment costs low or not? If you are thinking about a business mortgage, carefully consult various providers for interest rates, conditions and repayment options before making a final choice for one of the scenarios mentioned here. Buying or renting a commercial property is a strategic decision for the future.