To lease or to purchase? That is the commercial property question
A large number of modern businesses have developed into highly specialised organisations that use a ...
A large number of modern businesses have developed into highly specialised organisations that use a specific marketing model in order to deliver their offerings to a particular demographic range.
Whether this translates into a successful venture or not can rely heavily on the background strategic plans made by managers that can have long lasting effects on the daily operations of the firm.
One of the biggest choices made by companies across a broad range of sectors is the decision to either lease or purchase industrial property.
This is because the actions taken can have an impact across a broad range of activities undertaken by the company in question - and as such requires careful consideration.
On one hand, buying a piece of property can give the business exclusive access to valuable premises - a factor that can be hard for competitors to match.
However, renting a location provides an element of flexibility that is difficult to replicate when in possession of a storefront location - and can also help to keep assets in a liquid state.
Examining the costs and benefits of each scenario with an objective eye can be a great place to start - looking at potential cash flow changes and how they will likely impact on a firm's operations before selecting a course of action.