Whether your business is established or brand new, you'll likely have wondered whether to buy a Gold Coast industrial property or rent one. It can be a tricky decision, as there are advantages to either option.
It's about what works for your individual circumstances and business, both now and in the future. You need to be realistic with regards to what you need from a property in terms of space and facilities, what capital you need available for day-to-day business and how much time you have to manage the property.
Let's take a look at some of the benefits of owning or renting Gold Coast industrial property.
Renting
- Flexible terms – Renting can be a more flexible option as you can search for a lease that suits your commitment period and you may be able to negotiate certain terms. If your business needs change in future and you want a larger or smaller space, or a change in location, you can move more quickly without waiting for a sale.
- Smaller upfront costs – A big benefit of leasing over renting is that you can do it without having a large sum of money to put down. While there will be some costs associated with a lease, it won't be to the same level as if you were purchasing the property.
- Tax relief – As a tenant, your rent is tax deductible and you may be eligible for GST credits.
- Control of capital – By leasing, you avoid having to make a large capital investment, which leaves you with more to available cash to use within the business.
- Property management – Any maintenance issues with a rented property will be sorted out by somebody else – such as a commercial property manager or the landlord directly. This leaves you with time to continue running your business rather than sorting out plumbing issues or having to hire someone to organise it for you.
Buying
- Fixed costs – When you buy a property, there's no risk of the rent going up unexpectedly when the landlord needs to cover their costs. Although you'll be subject to changing mortgage rates if you don't buy outright, they are not at the whim of a landlord.
- Flexibility with space – Owning a property provides you with an opportunity to rent all or part of it out to other businesses. As the owner, you know you can expand into that space if you need to in the future, or you can shrink and let out more – making yourself a tidy side income in the process.
- Tax deductions – The Australian Tax Office allows you to claim tax deductions against costs associated with owning a business premises, such as maintenance and loan interest. You may also be eligible for GST credit on the purchase price and other expenses associated with buying a property.
- Capital gains – If there eventually becomes a point where you no longer need the premises, you may be able to turn a profit when you sell it. Especially if you've looked after it well or increased its value with new features or updated fittings.
- Make it your own – A benefit of owning commercial property is that you can fix it up to suit your exact needs, either as soon as you move in or if things change in the future. While this is sometimes possible with a leased property, your changes are at the discretion of your landlord and you may have to pay to get the property back to its original state at the end of the tenancy.
To discuss what works for your business and how we can help you find the right property, contact the team at Ray White Surfers Paradise today.
