Looking to start a small business? Upgrading? Whether you are starting your first small business or you have an enterprise that needs its next location to be among the other great businesses in Toronto, it’s important to ask yourself this question before deciding anything else: to rent or to buy? The answer lies in your situation and what’s most important to you when finding a commercial space. Below are a few of the top benefits to buying and renting your next commercial property.
Benefits of Buying
As with a residential property, buying a commercial space allows you to build equity for the property. Keep in mind this doesn’t mean you are building equity for the business, but rather the property itself. With commercial properties being so sought after – especially in the Greater Toronto Area – this is absolutely a positive as you can build your wealth while you grow your business.
With technology scaling back the amount of floor space businesses need to operate (and especially with automation on the horizon), you may find that in just a few short years you will be using less of your floor space than today. Instead of letting it collect dust, sublet it to another commercial business! It will give you yet another channel of income in addition to what you’re earning from your business.
Commercial space owners can also deduct certain expenses stemming from their property such as interest on your mortgage, property taxes, and any depreciable property such as out-buildings (e.g. new warehouse, storage shed, garage, etc.), company vehicles, and beyond. Speak with a trusted accountant to get a good idea on the types of deductions you would get from your commercial property and make an educated decision from there.
Buying a commercial space in Toronto, ON may seem like a good idea (and it is). But not so fast! There are several benefits to renting that you simply do not get when you buy a commercial property.
Benefits of Renting
Relocating is a breeze
The death nail to so many businesses happens when the neighborhood that surrounds the commercial space dries up and stops being lucrative – and it’s too late for the entrepreneur to sell. Small business owners that rent their commercial condo have the luxury of ‘rolling with the punches’ and moving when it’s time to relocate elsewhere. Sure, it can be expensive and a ‘make-or-break’ moment for the business but when it’s a matter of moving or perishing, renters have the upper-hand.
Maintenance is not your responsibility
As a renter, you’re never responsible for hiring professionals to maintain your property. Most business owners do not have the time to hire pest control, maintenance workers, cleaning companies, and the other maintenance professionals that keep commercial spaces looking, smelling, and operating great. This also allows you to free up a considerable amount of time for focusing on your business rather than your maintenance needs. When renting, maintenance on your commercial space is always, ‘out of sight, out of mind.’
When you need working capital
If you are building your first business, you’re going to need all of the working capital you can get. Especially in those first few years, it’s imperative to stay stable while growing internally, expanding, and most importantly growing your wealth. Sharing your capital with your real estate property isn’t going to help you when you need the maximum amount of working capital available from the start. If you have any questions or concerns, please speak with Dunpar Homes concerning commercial property opportunities. Our experts will help you to decide whether or not renting or buying a commercial space is ideal for your situation. From there, we can help you to acquire the commercial property your small business desperately needs. Call today, and let us help you from here!