Buying vs renting a warehouse? Which is best for you?
Commercial real estate has its own set of headaches attached, and when it’s about finding warehouse space for your business, you are in despair. When you have a realization that you need warehouse space, it’s difficult to evaluate whether to buy or rent warehouse space. Both the alternatives have their own pros and cons. This article will discuss some of the points that will help you make an informed decision.
Renting Warehouse Space
Finding a warehouse to rent will bring more commercial leases in front of you than purchases. This adds an advantage of having more options in choosing location, size and other essential requirements. A significant down payment is not required to pay which makes money usage in other areas of the business to grow. It becomes easier to locate and you have to spend less time on management.
There are some disadvantages like the annual rent increases and also you have to pay an increased cost for getting the lease renewed. You can experience limited growth and less control of the facility.
Buying a warehouse space
Buying a warehouse brings in better control of the property in your hands. You can manage it as per your needs. Your property can be used as leverage for gaining loans, funding etc, but if you decide to buy a warehouse, you will have to pay a higher upfront cost, that is why large companies are found to buy more. As you are the owner you will be responsible for the maintenance and repair of the property. While selling the property you might also face difficulties.
Both the options have their own advantages and disadvantages. If you have a huge company, you can go to buying a warehouse space and for small and medium-sized businesses renting is a better option as it is more cost-effective and flexible option for the growth of the business.