Tired rent to pay? If commercial real estate prices soften, you might think it's the perfect time to buy your own office space. But before you call an agent, don't forget that vs. rental have no easy decision, which can be done without many problems is to consider.
Is an Office owner can be a great feeling: the wall paint, rip on the carpet and make your space reflect your corporate culture and who you are. However, have an Office or all the property, is also a distraction. So have concerns such as roof repairs, taxes, will be Fuzzies not all warm in the world for them.
Here are the top issues to consider before he the leap from the tenant, the landlord:
You cannot afford the time? Many entrepreneurs would rather to take a real estate agent than sitting at their desks. But your business is not growing, while access and carpet removed is via Highway colors thoughts. Find that perfect Office can easily you will be a three-month process where with agents, bankers and decorators instead of employees, suppliers and customers spend time will be. You can afford the move? Get several thousand pounds of desks, computers, telephone systems and filing cabinets moved, also only a short distance, can be tedious and expensive. Getting everything back up and work can bring for days operating to a halt. Budget $1,000 and an interrupted day for every 1,500 square meters. You can afford the Extras? Compare you are not renting a mortgage payment. The mortgage holder pays a lot of things can the tenant not including property taxes, common area maintenance fees and insurance. More per month, even a small office rack can tools of several hundred dollars. A good broker should be able, you these charges project, before you in a contract of sale. You cannot afford the surprises? Often the most daunting part of Office property is keep with maintenance and repair work. If the air conditioner is in July, or a hail storm demolished your roof, can you afford this immediate cost? If two things happen in the same month, could your business recover from the hit? Can your personal credit to handle the load? If you have an exceptionally large company, it is likely that your personal credit score for considered is, and all mortgage loans affecting take you out for the company. If you are credit already stretching or see themselves emerging need for your son's college tuition on loan, can put an other great debts on your personal credit score be a bad move. Can do the work? An unpredictable venture is owning office space. Tax implications, irregular expenses and general expenses fall squarely on you and your staff. This ongoing distractions can drag a couple of hours per week from the work someone. Plan how this type of work fits in advance for your other activities.Specifically is missing in this list are complicated formulas for the calculation of elements such as such as capitalization rates and return on investment. If these things are important, consult you to a tax advisor, and repeat a crystal ball. Can make the tax consultant work real estate to its maximum advantage and the crystal ball? This is for predicting what will be the building in the value when you are ready to sell it.
No one can say reliably how long you use the building and what the market will do if you are selling, rather than the prediction of the future, so concentrate on the present want to. Better off, you will be through the payment of the costs of ownership, day for day, month to month? Or the simplicity of being the lessee makes more sense?
David Worrell is founder and Managing Director at AmeriStart and writes the Money Matters Blog at AllBusiness.com.
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