Deciding as an organisation to purchase a building or commercial space is a very big decision. It takes a lot of time, research and budgeting management to come to the final decision. Laws should be taken into consideration as well because there are tax laws that are applicable to businesses and properties owned. The local councils of the region would also try and help the organisation to move into that particular area with ease as it will create more opportunities for the community.
The following are the advantages of buying your own commercial property:
Making structural changes
Since the office space is yours, you are free to make any changes necessary unlike when you opt for north point office rental basis. Installing, renovating, removing or changing the layout is all in the hand of the organisation’s management.
Unlike paying office rent, you know the payment you will be making if a business loan has been taken from the bank. In the case of leasing, when the lease period is over the near rental maybe higher. This decision is solely in the hands of the owner.
Equity can be increased when assets are brought rather than they are leased. Borrowing against equity can be done in the event that more funds are needed for the expansion of the business or to cover operating expenses. When selling the property, it might be worth more money than when it was purchased.
The following are the disadvantages of buying your own commercial property:
The main con of buying your office space is the amount of funds needed for the advance payment. At least a minimum of fifteen percent must be paid to make sure that the property will be yours. This means that the money will be taken from the organisation’s operating capital.
As the property is owned by the organisation, it is the responsibility of the organisation to manage all the scheduled maintenance and repairs under emergency basis must be sorted out. This can affect the operating capital that is available currently in the organisation’s possession.
Once the pros and cons have been weighed and the situation of the organisation has been analysed, the final decision can be made by the chief operating officer and the head of finance whether to go for a leasing option or purchasing the space completely.
Other considerations must be taken into strong deliberation such as location, the space, the funds for interior designing and if new furniture is going to be bought. Once this has been thought about this also, the organisation is ready to move forward.