Many business owners are asking themselves the burning question: When is the right time for them to buy commercial real estate? Is your office expansion worth it, or is leasing better. As you may have guessed, the answer is not easy. Many factors go into deciding if leasing is better than buying. These are some basic considerations that will help you make a decision.

The Question of Cash

The first thing to consider is how much money your company can spend on commercial real property. You will need sufficient capital to pay a large down payment and cover the costs of property appraisals, inspections, loan fees, and other expenses associated with buying office space. Leasing will save you money in the short term, so it is important to consider how much cash you have.

Leaving Space for Growth

There's also the issue of office expansion. If you don't have the willpower to grow beyond a certain point in your business, you could see significant growth. You'll be ready for expansion if you have the capital to purchase a larger property. However, this is not always possible. You could end up buying more office space than what you actually need, rather than leasing.

Predictability

We have seen that it is difficult to predict the outcome of economic events in the past decade. However, this should not discourage you from establishing permanence wherever you can. If you can agree to a fixed-rate loan term, buying will guarantee a fixed price for your property. On the other hand, a lease is only a temporary agreement that puts you in the unstable position of possibly having to pay more on its expiration--regardless of whether you decide to renew or look for another location. You could face price increases depending on the terms and conditions of your lease.

There may be incredible opportunities to buy cheaply and sell at a profit, depending on the availability in your local market for commercial real estate. However, it might be beneficial to get professional advice to assist you in making your decision. A professional broker can help you explore your options and will provide you with advice based on years of experience.