Singapore is one of the most expensive places to live, work, and play. Because of its limited spaces and growing population, finding areas where you can conduct your business is not that easy. Some properties can cost millions of dollars to rent or buy. The rising costs of living and working in Singapore are problems many people encounter. As a small business owner, your job is to find a commercial office for rent (or purchase) in Singapore that does not break the bank.
Ownership of land is not your only option. Some people think buying an office space is the end goal because purchased office space is your property alone, but it is not the end-all-be-all of office space solutions. You can see this in the current trend of working from home. Businesses are already at a crossroads in dealing with purchasing offices to find more ways to rent them. Businesses need to figure out which of the two solutions is more likely to give them ROI or is the more advantageous alternative.
Why You Need to Rent or Purchase New Office Space
First, one needs to learn more about the renting vs purchasing debate. You can think of many reasons why you might be looking for a new office space. Here are just a few of them.
1) Your old lease is up soon
Maybe, you’ve rented old space before. Those with prior experience in leasing office spaces may not desire to renew their lease, thereby searching for a new office space necessary. Maybe a small office rental in Singapore is inadequate for your business needs. You are seeking to settle in a larger office or an office more suitable for your needs.
2) You are starting a new business
Every business needs a place where it can operate and perform its business functions freely. For most businesses, this place is a humble office. Offices are hubs where employees can focus their attention and energy on completing business proceedings. You will need an office space to house your employees.
3) Your business has recently grown
Growing a business is hard work. With the size of your business growing with each successful day, you would not be able to keep up with its operations if the size of your office remains small. You need a commercial or industrial property in Singapore suitable for the size of your operations. Your current office space may be inadequate to handle its proceedings.
Renting vs Purchasing: Pros and Cons
Now that you have identified whether you need to move to a new office space or stay put, you might want to consider whether moving your office space is what you want to do. Find the right time to do so. Do not make this decision hastily; this can seriously affect your profitability, disrupt office proceedings and lower employee productivity and satisfaction. Remember to consult your employees and other stakeholders before making a decision.
Another vital decision is whether you want to rent or purchase your office space. You should also consult your financial advisor before finalising your decisions, as they are a significant investment in your business. There are several pros and cons to renting and purchasing that you need to consider.
Here are some potential pros and cons of renting and purchasing:
Renting
Pros
1) Renting offers flexibility
The greatest strength of commercial properties for rent is that it offers maximum flexibility. All you are bound by is the terms and conditions of your contract. You are not restricted by the location, monthly payments, and others for longer than the length of your lease. If you expect your office needs to change in the next year or two, or do not expect to stay at a single location for too long, then renting is your best option.
2) It requires minimum property maintenance
For some, you do not have to pay the costs of electricity or power as the terms of your lease might state that you only need to pay a certain amount. Costs of repairs and building taxes are the responsibility of your landlord, so you do not have to worry about them.
Con
1) Your rent is likely to increase over time
Longtime renters tend to know this: over time, the costs of renting increase. Water bills and energy bills tend to increase— so do living costs. Your landlord may try to compensate for this by increasing the amount you will pay them.
Purchasing
Pros
1) Your space may appreciate over time
The most crucial benefit purchased properties have over commercial properties for rent is that land appreciates. Appreciation means purchasing land can become an investment and results in higher ROI. Purchasing land is attractive to many buyers because they can easily turn their offices into a vehicle for investments.
2) You have more freedom to design your building or property however you want
One of the best things about purchasing your property is that you have the freedom to make interior design revisions however you want. The construction process of your office is entirely up to you. You can do whatever you want with your property with less regard for what landlords have to say because you own your property.
Con
1) You will have to pay more costs for the property
The cost of the land is not the only thing you have to worry about. Property taxes are still something to worry about, and you will have to pay the costs of property maintenance. Property maintenance includes responsibilities such as water bills and electricity.
LHN Group helps you find all types of commercial rental properties. For more information on how to get a small B2 industrial space for rent in Singapore, reach out to LHN Group via their website.
