More office space, either purchased or rented, may be necessary as your startup expands. If you’re trying to decide between renting and buying office space, read our guide first.
It is both a thrilling and daunting notion to expand your small firm. As your startup grows, you may need to hire more people, but finding room in your current premises can be a problem. Expanding a workshop or an office could necessitate the search for new office space, the rental of additional floor space, or the purchase of additional real estate.
But think long and hard about what you need before signing a lease or shopping for more office space. Is your current office space able to handle alternatives like remote work, hot desking, or flexible work schedules? Until you really need more room, getting laptops instead of cumbersome desktop computers, clearing up your clutter, and purchasing smarter storage can all help keep costs down.
Is it necessary to lease more office space?
When capital expenditures like real estate are out of the question, small businesses often find that renting or leasing more office space is the way to go.
Office space can be rented in two ways. With a traditional lease, you can use the office space anyway you like and pay by the square foot. In addition to paying for insurance and maintenance, you will have to furnish the office. All furniture and maintenance are included in flexible leases. These are more costly than regular leases, but you can rent them for shorter durations.
The Benefits of Hiring a Commercial Space
You can save money by renting extra office space; most landlords need a manageable deposit and monthly payments. You can reduce your Corporation Tax liability by deducting rental payments as a business expense.
When compared to buying a leasehold or freehold property, renting offers more flexibility, letting you to expand into additional office space if it becomes available. Additionally, in premium locations, renting is often the only alternative.
Simplify your life by ensuring that the landlord or letting agent is held accountable for maintenance in your lease. Also, be specific about the services that are included.
Renting an office space has its drawbacks.
Any alterations to the office space would necessitate the landlord’s approval and are subject to certain limitations. When the lease is over, you might have to put the office back the way it was.
Particularly for the best spots, competition is fierce. Rents will go up unless you commit to a long-term lease, and finding other offices can be a problem if the hikes are too steep.
You’ll be locked in for the long haul, and rent is an expense that won’t go away just because business is slow or because you have to dissolve your company and pay more.
Is it a good idea to purchase more office space?
Central business districts sometimes only provide office space for rent, but in more rural or suburban areas, you might be able to purchase the building outright. If you purchase a building that comes with land and the option to extend, you may easily add on more office space as your firm expands.
The Benefits of Purchasing an Office
Investing in office space might be a smart move because of the expected appreciation in value over time. You can use it as collateral to get a loan because it will show up as an asset on your books.
The interest you spend on a mortgage to finance the purchase of office space can be written off as an expense, allowing you to pay less in corporation tax. Plus, you can generate extra income by leasing out the extra room when you’re no longer in need of it.
You can tailor the layout of the office to your specific needs when you purchase.
Is there anything bad about renting an office?
Buying demands a substantial financial commitment and is not inexpensive.
The lengthy and difficult process of selling your office space can be a setback for your company if you ever need to relocate to a smaller or larger space, or to a more advantageous location.