Corporate office: rented or owned?
Office rent: the diatribe between buying and renting of an office it has been going on forever.
Those who prefer buying intead of renting claim that with the latter, no investment is made, you only spend money; that turning on a mortgage means spending the same amount but you then become the property owner.
Here instead are the reasons in favor of those who say that renting an office is more convenient than purchasing it:
Let’s assume that the monthly rent is not much less expensive than the mortgage.
In the event of a crisis, if we are renting, we can change premises and move to a cheaper property quickly and easily.
In the event that the office was purchased, the operation is much more difficult.
It is easier to deal with the landlord for rent reduction, rather than with the bank for a lower mortgage payment.
Every building needs maintenance and every 10-15 years it must be restructured for the normal problems caused by usury.
This does not happen in the case of rent. The maintenance operations, in fact, belong to the property owner.
You can negotiate a rent that protects you from future tax increases and unpredictable costs, such as the waste tax; costs which as owners must instead be borne.
If we hold a mortgage, this could end up on the shoulders of our heirs. In the case of renting this does not happen.
In many cases, if we buy a property, it will take about 40 years to pay for it. And if we decide to sell it before we have paid it in full, we will face many expenses.
In the long term necessary to pay off the loan installments in order to become owners of the property, it will have been necessary to face many expenses and taxes, mandatory for an owner. Expenses that a tenant will not have to bear.
Owners must pay estate taxes , tenants don’t.
The value of a owned office enters the balance sheet and does pile on the calculation of corporate income taxes; a rented office is instead a deductible cost.