As a business owner, there are many things to consider when deciding on where to set up your company’s operations. Selecting the right location for your business is tricky enough — but choosing if you should lease or buy an office space adds another layer of complexity. If you are a medical practice, there are several factors to think about in your decision, including some of the following.
Flexibility
As you might imagine, leasing offers greater short and long-term flexibility than owning property. You may be uncertain about how your business is going to grow or contract in the future, and leasing a property can give you a sense of assurance knowing that you can leave the space if you outgrow or no longer need an office space of its size. When you purchase a space, it can take a few months to close on the transaction before you can make any improvements to make the office fit your medical needs. However, purchasing a property — particularly in a desirable location — may have long-term financial benefits.
Take Control
While leasing offers flexibility, ownership gives people the freedom to do as they wish with their property. Whether it’s creating a certain aesthetic in the lobby or putting your name on the building, you can do as you please. It also gives you the freedom to lease out office space for other businesses, resulting in more revenue from your investment. By leasing your space to other tenants, it provides you with payment stability.
Building Property
Another prospect of owning property is simply building your own. There are several things to consider: finding the right land, loan costs, construction costs, interest rates, and a long time frame before you could even begin occupying the office space. But ground-up construction provides an opportunity to create a space that fits your needs and possibly creates revenue through rent and long-term appreciation.
Market Fluctuations
Both buying and leasing are affected by market fluctuations. If you’re leasing, at the end of your lease term you may see an increase in the amount of rent you’ll owe if you renew. This is because the market in your area has risen and the property owner is meeting market price. It’s also important to know that if the market declines during your term, you may be able to negotiate a lower lease rate.
If you are the property owner you also have to worry about market fluctuations, as it determines the worth of your investment. If the office’s location is blossoming then you may be in a good position to sell the property for a strong price or generate interest from prospective tenants if you decide to lease it out. However, if the market is in a cool down, then you should wait for it to pick up before you sell.
Plaza Companies Can Set You On The Right Path
As one of Arizona’s top real estate agencies, we have the capabilities to work with your medical practice to find the right space for you. We are proud of our decades of work and look forward to assisting our future medical clients in their real estate needs. Contact Plaza Companies today to learn about our brokerage and management services.