Business owners know how desirable having an office in London is – especially one in a central location. Being the capital of the UK, London offers a whole host of benefits, from bustling streets to access to top talent. With an office in London, your business booms.
Unfortunately, one thing is getting in the way of a London office: the price. London is far from cheap, so whether you rent or buy, you can expect to spend a lot of your budget on office space if you choose the area. However, many business owners consider it worth it regardless of the high cost. The question is, should you buy or rent?
Factors to Consider
Choosing whether to buy or rent can be tricky and the answer is very subjective, as it depends on your business. Here are the factors to consider:
- Your business’s budget
- The size of the business
- The age of the business
Renting: The Pros and Cons
Pro: Less Property Maintenance
You don’t have to worry about maintaining the property when you find an office space to rent in London. Instead, that responsibility lies in the hands of the landlord. If the dreaded happens, such as a pipe bursting or a flood, it’s usually up to the landlord to cover those costs. They will have to hire the correct maintenance workers to sort it out. This absence of responsibility means you’ll spend less money and not have to worry about the property so much. Instead, you can focus on the business.
Pro: Flexibility
Only some businesses stay in the same place forever. If you’re uncertain of the future of the business, renting provides the benefit of flexibility, as you are not tied down to a property – you can rent elsewhere once the contract is over.
Pro: Pay Less Upfront
One of the most common reasons business owners choose to rent instead of buy is that renting is more affordable. When you rent an office space, you don’t have to come up with such a high upfront cost.
Con: Rent Increases
If you rent an office, you are subject to rent increases over time. Sometimes, these rent increases can be significant. However, as you have flexibility, you can also move to a different office if the increase is too much.
Con: No Building of Equity
Renting means you don’t own the property. So, if the property increases in value, you build no equity, which is something to consider.
Buying: The Pros and Cons
Pro: You Build Equity
Buying an office in London means making an investment. Its value will likely increase over time, meaning if you ever sell, you’ll have made more money.
Pro: You Have More Control
Say you want to remodel or update the décor – when you own your office in London, you don’t have to worry about getting the landlord’s permission, as you own the property. In essence, being the owner equals having more control.
Con: You Have to Manage the Property
There is a lot more responsibility involved with owning an office vs renting. If something goes wrong, it is your responsibility as the owner to fix it and potentially fork out a lot of cash to do so.
The Consensus
As you can see, there are pros and cons for both, so it really does depend on the business and, more importantly, its budget. Generally, though, unless you are able to provide a substantial upfront cost, renting makes more sense, as you will have access to trendier office spaces for a much lower price tag.
