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Renting vs. Owning Office Space – The Pros and Cons

office space for rentDeciding between renting or owning office space for your company is an important decision for any entrepreneur or small business owner. It may seem daunting at first since there are so many options and pros and cons to each possibility. That’s why we’ve listed a few pros and cons to help you decide which option is the best for your particular company.

Owning Office Space

Pros: When it comes to owning office space, there are a few benefits worth considering before making your decision. When you own office space, you can lock in the cost of the space with a long-term commercial mortgage, which will allow you the flexibility of planning your business’s finances well in advance. It’s also a great way to earn additional income since you’ll be able to rent out any excess space. The property will also appreciate over time, allowing you to sell it and fund your retirement when the time comes.

Cons: With the positives of owning, however, there are also several negatives that you should take into account before purchasing. Although you’ll be able to lock in a fixed cost for the mortgage, you will also lose flexibility. If your new or growing business suddenly expands beyond what you were expecting, you may outgrow the space and need to make a quick sale. There are also quite a few upfront costs such as property appraisal, maintenance costs, and a down payment. These costs can add up quickly and make purchasing office space a financial mistake if done at the wrong time.

Renting Office Space

Pros: There are numerous benefits to renting office space that can provide businesses with flexibility that they wouldn’t normally have while owning office space. Renting can free up much more capital initially to put back into your business and will also allow you to avoid the hassle and stress of maintaining a commercial property. You are also more likely to be able to lease office space that is in a prestigious area at an affordable rate. If you are a new or growing business, owning office space in the best part of town may be cost prohibitive but with a lease that may not be an issue.

Cons: When renting, however, you may be subject to variable costs and rent increases once your lease expires. You also won’t be building equity and it may feel like you’re funding someone else’s retirement. The hassle and immediate capital that you save, however, may be what your growing company needs to get a good head start.


Trying to decide between buying and renting office space is not cut and dry and will be different for every business. Be sure to weigh the pros and cons for your company before deciding. Once you have an idea of what you think is the best route, be sure to discuss it with your trusted advisors in order to make an objective decision.

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