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Often there is a temptation to dismiss renting as an option for your business because it is seen as "throwing good money away". Sometimes, buying is the best option, but it is always sensible to take a step back in such circumstances and consider some of the advantages of renting instead.

  1. Flexibility – buying a building is a big commitment and if you need to have some flexibility in your business premises, then renting, particularly on easy-in easy-out terms makes a lot of sense. If you suddenly find yourself in a situation where you have outgrown your office or workshop (or need to downsize in a hurry), the costs of selling an existing premises, and the time frame that goes along with this, can scupper your plans before they have got off the drawing board.

  2. Cash – it goes without saying that buying a property ties up a lot of cash resource – whether you are buying outright or just paying a deposit, you need to consider whether that cash could be better spent elsewhere in your business. Would your return be better if you invested that cash in new machinery, additional staff or developing new products perhaps?

  3. Less hassle – if you own your own property, anything that goes wrong immediately becomes your responsibility. With a rented premises, that doesn’t have to be the case. Many rental properties are shared-occupancy buildings and you are usually only responsible for repairs inside your own unit – if anything happens to the fabric of the building, for example, your landlord may well pick up the costs (although check your rental agreement to make sure!)

  4. High quality – often a business cannot afford the top of the market, in terms of the quality of its premises, if it is buying outright. However, if you do need that level of quality, renting can be a more affordable option.

  5. Convenience – you won’t always be available to take deliveries or handle visitor arrivals – if you are renting in a “managed” building, where reception services are provided, that worry is taken away from you and handled by the landlords themselves.

  6. Tax benefits – usually the full cost of your rent is tax deductible and remember, you won’t incur stamp duty or capital gains tax liabilities either.

  7. Shared services – many rented properties have shared services with other tenants – this means that you don’t have to purchase your own phone system or photocopier for example – just hire these services as required. You may also get added benefits from shared meeting rooms, cafes or even a gym.

  8. Interest rates – if you are borrowing cash towards the purchase of your premises, you may be susceptible to interest rate changes.

  9. Location, location, location – if you have a short-term lease or easy-in easy-out terms on your rented premises, you can, more easily, follow your market should geographical focus change.

  10. Keep it simple – ultimately, renting on easy-in easy-out terms does exactly what it says on the tin and keeps life simple – something we all strive for!

Renting won’t be for everyone, but hopefully the points above have given food for thought. If you are after a simple, flexible approach, have a look at the premises UK Steel Enterprise offer and come and talk to us today!

Simon Hamilton
Author: Simon Hamilton
Simon was appointed Managing Director in 2013. He brought wide experience in business banking and management to UKSE when he joined 16 years ago and headed the UKSE teams in the North of England region and Scotland for several years. During that time, he oversaw both the investment and property functions, including the development of the two multi-million pound Innovation Centres on Teesside.