The recent trend in commercial rentalshas shown a higher rate of yield than the residential properties, which means more entry of firms in the former. This leaves the businesses spoilt for choicesand majorly confused about the financial decisions related to the investment into real estate – Buyingorrenting,which remains the chicken and egg question for most businesses. Here are a few logical reasons stating why renting is better than buying:
Has the commercial real estate broker been coercing you into buying a property by forecasting imaginary long term benefits?It’s entirely up-to you to buy if there aren’t any budget constraints. However, considering today’s commercialized market, which is overflowing with brands and businesses, advertising is the way out. Advertising costs are inevitable for both startups and dominant brands. An increasingly major amount from the budget is being allocated to advertising. Renting of commercial property can hence facilitate the increasing advertising costs.
Safety and Maintenance
The commercial rental properties have low maintenance and safety costs. Safety measures like fire safety, workplace requirements, gas safety, and electric safety are already taken care of in rented properties and only need a periodic maintenance. Forum commercial real estate, a comprehensive service provider, assist in every aspect of development process giving an edge to the businesses from rummaging itself into the vicious cycle of trial and error and saving a great deal of time and money in the process.
Depreciation of Capital
While the land value increases, conversely the value of building and workplace equipment decreases i.e. they depreciate over a period of time, which adds to investment costs and will affect the budget for operations or management in the long run.
Size of Operations
When you start out, you can never fathom the scale of operations in the next few financial years. With rented properties, there is always room for flexibility either to expand with constant scales to returns or exit the market upon loss.
There are constant additions to cost if you have bought a property – like insurance, mortgage payments,surveys, property searches etc.
Perhaps, the business isn’t benefitting in a way you anticipated and you may decide upon testing a new location. Renting gives flexibility in such a scenario.
The consumer market is unpredictable and its boom can only be anticipated in certain locations.Renting properties can provide the benefit of either expanding or relocating to these areas.
Renting of commercial spaces is a relatively fresh concept, but is backed by the good old practice of research. Many traditional businesses are now transcending into a more flexible structure than its earlier rigid form.