Renting a space
Renting business space provides flexibility without a long-term commitment — a desirable situation for startups or new business owners.
- Liquidity. Renting demands much less money upfront. You maintain control of your ready cash and can make investments elsewhere in your business.
- Tax benefits. Unlike with buying real estate, where only the interest portion of your monthly mortgage payment is tax deductible, 100% of your monthly lease payment can be deducted from your business taxes.2
- Flexibility. Commercial leases are typically three to 10 years in length. If you outgrow your space, it's much easier to find another spot at the end of your lease. If you own the property, your choices are to sell or expand, which can be inconvenient.
- Lack of control. Since you don't own the space, you have to get approval to make any changes. Your rent payment can also be increased at the end of your lease. If you can't afford a higher rate, you'll have to find — and move to — a new location.
- Higher monthly fees. In some areas, rent is often higher than a mortgage payment. Depending on your agreement, you may also be responsible for monthly property taxes, insurance, and utilities.
- Lack of equity. If you're in an area where property values are increasing, renting doesn't give you any of the asset appreciation benefits that owning does. In addition, if you make any improvements, such as remodeling the space, you won't realize any gains if your work increases the value of the property.
Make the right decision
Analyze your business goals, financial situation, and market trends to decide which option offers the most important advantages. Remember, there isn't a one-size-fits-all answer that works for every business.
Whatever you decide, you'll need the cash flow to support the associated costs. Whether it's a Small Business Administration loan, a traditional business loan, or a line of credit, we can help you get the financing you need for the right business space. Start the process by contacting us at 1-888-SYNOVUS (1-888-796-6887) or visit a local branch near you to find out more.