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Is it better for a business to rent or buy an office building?

On Behalf of | Mar 25, 2016 | Commercial Real Estate

There are many companies that have made the decision to make South Florida the location for their headquarters and other important facilities. There are a variety of reasons why a company would make this decision. South Florida has major urban locations that provide relatively easy access to South America, among other trade markets. In addition, many people in the workforce in South Florida are well-educated and resourceful. Moreover, the pleasant climate in South Florida may just be enough to recruit the right workers.

However, when a company is making a decision to set up shop in South Florida or any market, they will oftentimes need to make a decision as to whether or not they will buy an office building where the company’s employees can work, or if they will instead rent a piece of commercial property for this purpose. The overall profit the company reaps may very well be impacted by the decision.

So, it is better for a business to rent or buy an office building? In reality, the answer will come down to the particular financial standpoint of the company in question. For instance, if a company decides to rent an office building for their staff, they will expect that the landlord will take care of certain aspects of maintaining the building. That may relieve some financial pressure.

But, on the other hand, if the company makes the decision to buy an office building, there are potential advantages to that decision as well. For instance, if the company does need to relocate, they will still have a valuable asset in the office building that they can then turn around and potentially rent out to a tenant of their own. Making the decision between renting or buying an office building can be tricky for a company in South Florida. Having the right information can be crucial in the decision making process.

Source: finweb.com, “Commercial Investment Property: Stores and Office Buildings,” Accessed March 19, 2016