If you are starting in entrepreneurship, leasing may seem apt. But, as you grow, you will feel the need to bring about changes and scale up. These may or may not be possible in leased premises. Apart from the cost advantage, you get nothing in terms of tax rebates or any subsidies from rental space.
There are numerous reasons why entrepreneurs should get their own property. Today, most banks and financial institutions offer myriad loans with competitive interest rates and low down payment schemes. So, it will be wise on your part to pay the same amount that you are paying as rent to your financing body and get a space registered in your name.
Read about the significant benefits you can avail yourself of by purchasing your own establishment.
Use It as an Exit Strategy
Most business owners have an exit plan with regard to the business. The ultimate benefits of selling a property after 10-20 years are pretty lucrative, looking at market conditions. In fact, that is one reason why smart business people buy their own property, which is an asset, and start operations from there. If you plan to sell the company within a few years of inception to some angel investor, you could do away with buying.
But most entrepreneurs who have longevity in mind consider commercial mortgages over rental payments. Moreover, if you are an entrepreneur having a property, you can rent it out to some future tenants if there is a monetary need or move out to more greener pastures. But getting a great property with a happening location for business is not easy. You may not be sure about footfalls if you are new in the area.
But you can surely get a great deal if you go through house and land packages offered by agents. They know the market well and can give you the best deals. You can even use it for your retirement. 15 to 20 years down the line, the property rates will appreciate. This is the only sector where you can profit by holding on to your assets for a longer tenure.
Get Rental Income
You do not need to wait for years to get the desired selling price. Sometimes, many entrepreneurs let out parts of the establishment to other businesses while operating from the other portion. This way, it is possible to pay off a part of the loan from the rentals that you get. It is quite easy to find homes and residential properties. You need to rely on a few characteristics to source such spaces. However, zeroing down upon a commercial space at a great location can act positively in multiple ways.
Firstly, it is an asset. Secondly, you get to pay off part of your mortgage loan with it. However, there is no guarantee on the price that you can recover. But no asset or investment has any sort of guarantee as such. At the end of the day, you have to depend on market conditions. It is a long-term asset that can fetch you more money in multiple ways today.
Get Fixed Budgeting Advantage
By buying a commercial space on the mortgage loan, you can be sure of the loan EMIs. Depending on the type of loan you are considering, there may be minor deviations. Apart from that, there may be changes in property taxes. However, the loan amount generally remains the same. Additionally, you may also get rewards for timely payments. However, in the case of a rental property, there is a certain increase every year. And, if you disagree with what the owner says, you might have to part ways with the space.
It is not at all lucrative. After starting your business, you must have done sufficient marketing to establish your presence. Changing the address from time to time can create a wrong impression on your stakeholders and customers. No one may trust you, as you will constantly be on the move. Moreover, you also have to endure the pains of amending the business address in all permits and licenses.
Freedom to Customise
If you happen to buy the space and start your business, it gives you a lot of freedom to renovate and remodel according to your business needs. However, most tenants cannot make any big structural changes without the go-ahead of the owner. And, sometimes, they do not even allow that. It may happen that you start small. However, in time, you may have to expand.
If it is under your name, you can do just about anything to make the space comfortable for your workspace. Get the freedom to handle the place you deem fit.
Get Tax Advantage
When you buy a property and run a business from there, you can avail yourself of tax rebates on loans and capital. In certain locations, it is referred to as capital tax allowance. The sum is quite neat. And, can help you keep a large part of your profits to yourself.
These are the ultimate advantages of owning the space from where you plan to start your business.