Polski PL English EN Русский RU Українська UK
Polski PL English EN Русский RU Українська UK

Purchase or rental of commercial space - which is better for the company

Every entrepreneur sooner or later will be faced with the question of whether to rent or buy space for an office, shop or other type of service premises. Many entrepreneurs are inclined to the second option, which is the purchase of commercial space. It turns out, however, that in some cases, renting is a much better option. What solution and in what situations to choose?

Pay off the loan and own the office or pay monthly rent for commercial space? The answer seems clear. It is much more profitable to buy a property that becomes the property of the company. The stimulation of costs shows that such a solution is more profitable, regardless of whether we want to buy the premises in Warsaw or in a smaller city. However, it should be remembered that the purchase of a commercial property may also have its disadvantages.

The company's financial situation, stage of its development, space needs, tax aspects and security

these are the key issues when deciding whether to buy or rent commercial space - explains real estate advisor Magda Adjemean from Wilsons Nieruchomości, who runs renting a commercial property in Wola.

When is commercial space lease profitable?

Renting an office or a place for service premises is a profitable solution when the company's situation is not stable, the company is still developing and flexibility is important to it. In such a situation, the property owned is a burden for the company.

Magda Adjemean from Wilsons Nieruchomości advises against the purchase of property to those companies that are just entering the market and building their position. In this case, renting is the better option. It is easier to give up on it and replace the leased space with a larger one or one located in a more prestigious district.

Companies that do not have or have low creditworthiness should also decide to rent. In their case, the purchase of a commercial property is only paid for in cash. Such transactions, however, do not happen often, most entrepreneurs finance the purchase of office space with bank loans (at least some of the transactions).

When is the purchase of commercial space profitable?

Looking from the long-term perspective, the optimal and most profitable solution for business is the purchase of office space. With the current credit conditions, it is possible that the monthly installment will be lower than the rental costs. Tax issues are also mentioned as financial benefits of having your own office. The commercial property owner can deduct VAT and additionally reduce the tax burden by using the property depreciation. Entrepreneurs who decide to lease real estate can also take advantage of the fact that VAT is not paid in advance, but added to each installment.

Ochota - a good stop for business

Financial considerations are not the only benefits of commercial property ownership. Located in good points such as e.g.. commercial premises in the vicinity of Inflancka and Pokorna streets  will constitute an investment from which it is possible to release capital over time without losing the possibility of using the attractive space. Real estate owned by an enterprise can be rented or sold, increasing the company's capital. As the data shows, when selling a property, in most cases, almost the entire cost of buying an office will pay off, and with good prices on the market, you can even earn. This is due to the fact that the value of commercial premises and offices has been growing over the years.

The profitability for a company to rent or purchase commercial space depends on many factors. It is difficult to clearly indicate a specific solution for theoretical business, because each company needs a different type of premises, in a different location, with a different size and with different architectural solutions. The time of the company's presence on the market, the stage of its development and the financial condition are also important. Therefore, before making the final decision, the entrepreneur has many issues to analyze.

Share this post
Share on facebook
Share on linkedin
Share on twitter
Share on email

read on

Do you want to sell or buy real estate?

Write to us and we will take this problem off your head!

The site uses cookies to deliver services in accordance with Policy regarding cookies. You can specify the conditions for storage or access to cookies in your browser.