To rent or to buy? That’s the question! It’s honestly a good question, too, because with rent- both commercial and residential constantly going up and real estate becoming more competitive, it’s really not hard to see why so many business owners, both new and old, are opting to own the physical location of their business. In a way, if you think about it, it truly is a great way to keep your business safe from things like rent hikes or dealing with the risk of being kicked out and so on.
With that said, however, while there are more than enough positives to business owners being able to own their own workspace, at the same time, there are some dangers to this, too, that you need to be cautious about. These shouldn’t deter you from buying real estate in the name of your business, but in general, this is just so important to know. So, here are potential issues any business owner might expect if they own their own workspace.
It Can Be a Financial Burden
While owning office space can be a solid investment, it also presents a significant financial commitment upfront. So, can your business afford this? Can you afford this? This means that allocating substantial capital to the purchase may limit liquidity, potentially impacting your business's ability to respond to unforeseen expenses or invest in growth opportunities. You can kind of see this as a catch-22 because you’re trying to protect your business with this investment, but at the same time, this potential investment might not protect your business at all.
You’ll Have to Deal with Maintenance and Repairs
While yes, maintenance and repairs are usually needed for buildings, even if you’re renting your space, it’s usually not you who has to be the one to book the contractor/ repair person and then pay for the services. That’s something that has to fall on the landlord. But if you are the owner, than you’re going to have to take care of all of this.
This means that you’re going to have to budget for ongoing maintenance costs, unexpected repairs, and regular updates to ensure the space remains functional and complies with building codes.
Sometimes, hiring the right professionals can be challenging because even office buildings have to deal with roof repair, gutter cleaning, and other services that PorterVac provides. In general, when it comes to workspaces, any commercial space really, there’s always going to be maintenance and repairs, so are you willing to pay for it?
Market Volatility
Nowadays, an economic down turn is more unpredictable than ever. On top of that, the real estate market is volatile, and the value of commercial properties has been fluctuating. One thing every business owner seriously needs to keep in mind is the fact that they really don’t want to put their business in a bad financial situation. So, you might need to really look into trends to see what’s safest for your business.
Lack of Flexibility
Business needs evolve over time, and owning a fixed office space may limit the flexibility to adapt to changing requirements. On top of that, there might be changes within the market or industry as well. For example, if you own a cafe or store where people can visit, if it’s on a popular shopping street, and then that shopping street basically dies or becomes less popular, than your business is at risk, and you’re most likely locked into this property.
