One of the important points in making business is buying or renting one is better, this article will tell you that both buying and renting are the advantages and disadvantages deferent. Today we will summarize for you to know as following.
Advantages of Buying.
1. There is ownership in the business completely and does not worry about the lease expire?
2. You can change the decoration you like and fully worth with the investment, entrepreneurs don’t worry that already invested and not to renew the lease. This will make the investment wasted the tenant can’t be dismantled come out.
3. If making location prospers in the future, the Company’s assets are valued higher and this will help stabilize of the business more.
4. Depreciation expense of buildings can be used for tax deduction and making business, pay less tax.
5. Shop and land is an asset that can be used to guarantee loans.
Disadvantages of Buying.
1. Need invested a lot may adversely affect the Company’s liquidity and the amount of money lost in fixed assets investment return slowly.
2. If the location is not as good as anticipated or changes in the negative in the long term, the purchase will make migration more difficult than rent.
3. Risk higher rent.
Advantages of leasing.
1. Investment is not much to start a business, just deposit a certain amount and pay rent monthly installments each month.
2. If the location is a problem in the long term. Businesses can migrate more easily than when buying a property.
3. Tenants are not responsible for the deterioration of the building.
The disadvantage of leasing.
1. If the lessor does not agree to renew the contract. Businesses will need to migrates their location and lose the benefits of the renovation of the place to invest.
2. Modification of the places must receive the consent of the lessor.
3. Negotiating terms and conditions the lease must be done carefully and concisely written, tenants who were not careful or don’t have sufficient knowledge about contracts, often a disadvantage.
Precautions in the rental shop or place of business.
1. Entrepreneurs should bargain with the landlord in the lease carefully, to do useful in the area, the prohibition to take place, before signing a contract agreement. Changes after signing a contract and then do very difficult. Except lessor agrees with us, the lessor usually reserves the right, in compliance with the contract.
2. Identification of adjustments in the future. The scope should be clearly defined as a number to ease adjustment each time must be do every year.
3. Sometimes business tenants didn’t succeed as it should and must be shut down, before of the contract. Tenants may have to pay rent or pay the rent already; the tenant should find a solution for it or terminated prematurely.
4. Improvement of location should not be dedicated funding more than necessary, because when cancel the contract the tenants can’t be dismantled to decorate it back.
5. If the tenants do not smart about the contract that you should consult a lawyer, to ensure that the agreement is fair to all parties and have a content comprehensive all the cases such as maintenance, conflagration natural disasters, etc.