Business owners often get stuck in a dilemma when it comes to expanding their operations or establishing businesses on whether to rent a warehouse or invest a large chunk of money in buying it. If you are one of those who are in the same dilemma, then we are here to get your doubts cleared and help you in making a sound decision.
A common question that haunts most business owners of transportation company is whether to buy the warehouse or lease it. As every coin has two sides, leasing and purchasing warehouse property has its own merits and demerits.
Investing in a warehouse property has been considered a wise decision in terms of financial aspects, but leasing out one is a good idea too. The decision to buy or rent must be calculated on several factors depending on the requirements of your business. Let us see what factors must be kept in mind before making the decision.
5 Things To Keep In Mind When Renting Or Buying A Warehouse Property
1] For How Much Time Period Do You Want The Warehouse?
The first question before deciding on buying or renting a warehouse is how long you want the warehouse to be operational in that particular location. Investing in a warehouse is only profitable when you intend to operate it for a very long time. If you plan to change the location of your business plan in the near future, then leasing a warehouse property is a wiser decision.
2] Are You Ready To Pay For The Maintenance Expenses?
When you buy a property, whether for residential purposes or warehousing, you also need to take care of its maintenance charges. You are liable to pay for every maintenance and repair of the property as the owner of the property. But, in the case of leasing the property, you save yourself from the expenses and hassle of taking care of the maintenance of your warehouse, giving you time to focus on your business.
3] Chances Of Increase In Rent Amount
As capital rates are subject to an increase in price, if you lease a warehouse, you are liable to keep up with the price increase. This does not take place in the case if you buy the property as you just need to pay the amount decided on buying. The rent, on the other hand, can increase every year, increasing your liabilities.
4] Control Of The Warehouse
As the rightful owner of the warehouse of ocean freight services, you have complete authority and control over your property. But if you rent it, you have to seek approval from your landowner every time you need to make some minor changes within the warehouse. Upon buying the warehouse, you can even remodel your property or make changes to suit the requirements of your logistics partner, which is not possible on renting, most of the time.
5] Equity Gains
When you buy the property, with the passage of time, you will be liable to reap the benefits of the increase in the property’s price. It is impossible when you rent it, as you have the price decided by the property owner, irrespective of a rise or fall in its price. Upon buying the property, you will be entitled to all the benefits regarding the price, which can be used for your further deals or expanding your business.
Conclusion
It is a tough decision to make whether to rent a warehouse property or invest money in buying it. Before making this important decision, make sure to ascertain all factors and analyze your requirements thoroughly. If you are planning to operate your business for a long time, then it is better to buy the warehouse property, but if you have short-term goals, then renting will be more favorable for you. If renting a warehouse is the route you want to take, then check out Avon, IN small business warehouse for rent, located in the state of Indiana which is known as the premier logistics hub in the Eastern United States.
