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Leasing vs Buying Space for Your Business

As a business owner, it is important to give your employees a functional workplace to conduct their day-to-day job duties. Before you can do that, decide whether to buy or lease office space. Read further to learn more about the pros and cons of leasing an office space versus buying an office space and factors to consider when making a decision.

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Pros and cons of leasing an office space

Leasing office space presents advantages and disadvantages depending on the needs of your company. Review the following list of pros and cons according to apaservices.org to help you determine if leasing an office space is right for your business:


Here are some potential pros of leasing an office space for your business:

  • Retain flexibility to grow your business with ease because once a lease is up you can choose whether you want to renew it or relocate
  • Secure an office space in a location where you couldn’t afford to buy
  • Focus on running your business rather than ensuring maintenance and upkeep of the property
  • Earn tax deductions for rent, utilities and insurance


Here are some potential disadvantages of leasing an office space for your business:

  • Inability to make the office space their own
  • Possibility that rent will increase over time
  • Missing out on earning equity should the market value increase
  • Obligation to rely on their landlord for repairs and other factors

Pros and cons of buying an office space

Depending on your company’s finances and business needs, you may find it beneficial to buy office space. Review the following list of pros and cons according to QuickBooks to help you decide if you should buy office space over leasing:


Here are some potential pros of buying office space for your business:

  • Ability to sell a property once its value increases
  • Ability to make renovations to the property
  • Opportunity to rent spaces to other companies for additional revenue


Here are some potential disadvantages of buying office space for your business:

  • Responsibility for maintenance costs and repairs
  • Obligation to pay a large down payment ahead of purchase
  • Responsibility for enforcing building safety and liable for injuries on the property

Factors to consider when making a decision

There are several factors to consider when making the decision to buy or lease office space for your business. Here are a few factors to think about before finalizing your decision, according to Southgate Realty:

Your budget

The amount of money you have to spend on an office space is an important factor to consider when deciding whether to rent or buy. If you currently can’t afford to buy an office with your desired location and property, it may be beneficial to rent office space while creating short and long term savings goals to save for the property.

The size of your company

If you currently operate a small- to medium-sized business, you may benefit by waiting to purchase an office space until you have achieved the kind of growth you want. Purchasing an office space that accommodates a small team might mean you have to sell and buy a larger office space in the future.

The potential for moving locations

If you want to move your business to another city or state, renting might be better as it provides a temporary office location until you can move your business to the desired location.

The desire to renovate your office space

If you want to customize your office space to reflect your company, purchasing may be better as landlords typically have rules about renovations to rental spaces.

The potential to make money off your office space

If you want to generate revenue from your office space, buying could be a great way to do so. You could sell it once the value goes up or rent it out to another business after you transition to another location.

Frequently asked questions about leasing vs buying

How much does it cost to lease an office space?

According to MarketWatch, the amount it costs to lease an office space depends on several factors, including the location and square-footage per employee. For example, for a company in Boston, an office with 1,974 square feet of space would cost $30.40 per employee. This would translate to $6,080 in annual rent per employee. So, if the company has 15 employees, annual rent would total $91,2000.

How do you lease a commercial office space?

According to Bankrate, you can successfully lease a commercial office space by doing the following:

  1. Set your budget for monthly rent expenses
  2. Research local commercial real estate agents to find the right one for your needs
  3. Contact and meet with a commercial real estate agent to establish your company’s needs
  4. Survey several office spaces available for rent in your area
  5. Compare the pros and cons of each (location, interior layout/space, rent expectations, amenities)
  6. Don’t be afraid to try and negotiate rent pricing with landlords
  7. Meet with the landlord to confirm the duration of your lease, rent payment method and amount
  8. Pay a security deposit

How much does it cost to buy an office?

The amount it costs to buy an office depends on several factors including the location of the property, size of the property, internal amenities and the requirements for upkeep. For example, purchasing an office suite in a business park may cost less than purchasing a small office building. Look at commercial listings in your area to determine what you can afford.

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