Buy or Rent Office Space in Baltimore?

1
Buy or Rent Office Space? What Should You Do?

• City Property Solutions
• 7310 Knollwood RdTowson, MD
• Phone number [phone]

2
Factors

• Whether a company is an established business or a
  fledgling start-up, saving money is always a good
  way to impact the bottom line.
• So the question of whether to buy or rent office
  space eventually comes up in evaluating your
  options. Since most businesses start off renting,
  the question is usually whether or not to stop
  renting office space and purchase either their
  existing office or moving to a new facility.
• There are many factors that go into the decision
  of whether to buy or rent office space. Here are
  a few of the most important factors a company
  should factor into their decision.

3
Cash Outlay
A mortgage will require a down payment of at
least 10, on an SBA loan, but more often
will cost up to 25 of the purchase price. The
cost outlay of renting is usually just the first
and last months rent.
4
Opportunity Cost
Since a down payment is a considerable amount of
cash, a company will have to consider the cost of
missing out on the resources being allocated
elsewhere. What sort of return could you expect
on the money invested in real estate vs. your
potential return from the real estate investment?
5
Fixed vs. Variable Cost
When a company purchases a building, the costs
are pretty much fixed, especially if that company
has a fixed-rate mortgage. This is not the same
if you lease, since prices depend on the market.
6
Growth Considerations
Are you an established company or are you in a
growth phase? Are you looking to add more
equipment, staff, etc.? Renting office space
would offer more flexibility for the future. If
you are more established, then this need is
obviously less important.
7
Property Management
Managing a property (i.e. repairs, lawn care,
etc.) costs money. If you dont do it yourself,
you will have to contract it out to someone else,
which will be added to operating costs. Many
companies curtail this cost by buying more space
than needed and then renting it out to other
businesses.
8
Appreciation
One of the main advantages of owning office space
is that the buildings value will appreciate over
time. On the flip side, renting is essentially an
expense with no return from an investment
standpoint.
9
Tax Factors
Lease payments are fully deductible,
while expense on an office needs be written off
over many years. However, if you own an office
then you can deduct all interest payments and
take depreciation on capital improvements.
10
Conclusion

• Most of the rent or buy office space factors can
  be calculated by the business owner, but it is a
  good idea to consult a commercial real estate
  professional to get a better idea of your
  options.  Still, the final decision rests with
  the business owner, so it is important to run a
  cost-benefit analysis.

11
Contact US

• City Property Solutions
• 7310 Knollwood RdTowson, MD
•  Phone number [phone]
• http//www.Citypropertysolutions.com/
• Resource- https//goo.gl/QAtwhF