Many people believe that opting to rent office space as opposed to buying it is a poor decision for a business or company. The general assumption is that you would be pouring money down the drain on a regular basis without enjoying ownership of the property even in the long term. However, although owning office space may be considered a worthwhile investment, there are several reasons why renting office space may be preferable for a new business.
When establishing a new business, the more affordable option is usually to rent office space. The amount you need to put up at the start when you rent is a lot lower than what you would need to buy property. Renting property will therefore allow you to invest in other crucial factors that directly affect your business growth, such as marketing.
Purchasing premium offices in the city may not be an affordable option when you are just starting out. This would mean that you would probably have to opt for property outside the city if you absolutely have to own property. On the other hand, you can easily find affordable rental office options within the city. Remember that an office location that is accessible to potential customers is critical to your success as you look to build your clientele.
Room for Growth
Purchasing property when starting out a business may not be a good idea because as the business grows, your business needs will also change. For instance, you may require more space for more employees, or you may even need to move to a new location based on your clientele. It would be difficult to determine what your future needs will be when starting out, but when you rent office space, you have the flexibility you need to move to new premises when it becomes necessary to do so or renegotiate on the amount of space you need.
Purchasing office property generally allows you to know what your costs will be particularly if you get a fixed-rate loan for it. However, you will probably also have to deal with numerous overheads that might increase your expenses significantly. Generally, you can move into a rental office space immediately and if it is already furnished, you can start operating as soon as you move in. In addition, all the standard office facilities will already be in place, including utilities, the kitchen area, meeting rooms and reception areas. You may also be able to get IT support, post services and executive suits.
Making Your Decision
Opting to rent office space in Shoreditch is generally preferable for business people that cannot make the large upfront investment that is required when buying property. Note that your cash flow will be crucial especially during the first few years of doing business. Renting is also a good option if you are unsure about how much space you will ultimately need and if you would rather not deal with the various responsibilities and costs that owning commercial property brings with it. However, buying office space will ultimately make more sense as your business becomes more established and you have the finances to take up a large real estate investment.