New business owners often buy a property since this asset increases in value over time. However, among the advantages of buying your property while starting a business lie a slew of disadvantages you need to be aware of.
Buying a Property While Starting a Business is a Bad Move
First, startup entrepreneurs need to shell out a lot of money to secure the deposit for the property. Furthermore, the monthly mortgages and loan payments, along with maintenance and repairs, could take a massive toll on their bank account. All that money could have otherwise been used to fuel their business or other ventures.
The next thing new business owners should realize when buying a property is that they will be tied down to the location for a long time. By establishing their business near or on the newly purchased property, the business owner will have a hard time relocating to another city or state when the market and other trends change. Consequently, transferring to another state is a complicated process that involves selling and finding buyers for the property.
Lastly, startup entrepreneurs will have less time to dedicate to their business when they buy a house. After all, owning a home means having to perform weekly maintenance and daily cleaning themselves. New business owners will have to take care of the problem themselves, leaving less time to concentrate on their business. In conclusion, it’s best for startup entrepreneurs to rent an apartment instead.
Renting an Apartment Benefits New Business Owners
Startup entrepreneurs looking to establish their business will benefit more from leasing or renting an apartment than buying a property. Here are some reasons why renting an apartment helps startup entrepreneurs thrive in economic downturns.
More Room for Rent Negotiation
With the rise of the housing market, startup entrepreneurs will have to settle for a property with a higher selling price. If they choose to rent an apartment, they can get better deals when negotiating rent with the landlord. Furthermore, if the business owner decides to rent an apartment for the business operations, they won’t experience changes in its value throughout the business.
Multiple Options To Choose From
Owners looking to start their business, particularly online businesses, might want to double their home as office space at the same time. Luckily, there are a lot of options to choose from when selecting an apartment. If all they need is a small space to run their business, they can rent a single-bedroom apartment. By doing so, business owners can save money by only renting the space they need.
Fewer Maintenance Duties
Most apartments have landlords maintaining the property instead of the tenants. By renting out a property, startup entrepreneurs wouldn’t need to worry about repairing broken fixtures in their rooms. Examples of routine maintenance that the landlord can do for the tenant are roof repairs and maintenance, window and door repairs, heating, plumbing, and electric equipment maintenance. Consequently, some landlords take care of home improvement and weatherproofing for the tenant, such as snow shoveling the walkways and cleaning walkways and hallways.
One of the most attractive aspects of renting instead of buying is mobility, particularly for business owners operating in a volatile industry with drastic changes in trends. Consequently, if they’re unsure whether the selected location would be viable in the long run, they can simply move to another location in the future.
What To Consider When Renting an Apartment
Choosing an apartment that’s perfect for business can be quite tricky. After all, every startup requires different equipment and space. If you’re considering renting, it’s essential to check for the following aspects of the apartment:
- Is the location suitable for the business you’re starting? Not all areas are ideal for the company you’re planning to create. Some apartments also need extra permits when you run a business. In other apartments, you are not even allowed to open a business at all.
- Is the apartment too large or too small for your business? If you’re renting out a location that’s too big for you, you’re wasting money. Consider subletting to reduce the cost of the rent.
- How long is the contract? If you’re thinking of moving to another location in the future, it’s best to have a short contract.
- Is the apartment within your price range? When choosing an apartment, always check whether it’s within your budget.
While renting and buying both have advantages and disadvantages, the former is best for startups because of the reduced cost per area. Hence, if you’re sure about renting, research the area’s commute times, safety, and the average cost of the rent.