Commercial Property: Why Rent?
The decision whether to rent or buy commercial property can make a huge difference on your company’s performance and cash flow - especially when concerning commercial property in London. However tempting it may be to begin scanning the property media for those ‘insider insights’ into what the market is doing now and will do in future, in reality there are far better ways to approach your decision. It is far more practical to simply focus on your company’s business needs and how they would be served in a particular scenario. Use our guide here for some key reasons why many companies choose to rent commercial property.
Renting provides newer businesses room to grow naturally: Renting is a popular option for smaller or newer businesses as it takes away the pressure of trying to obtain financing until you’re ready to do so. When you consider the high sums involved per square foot for any commercial property in London it is a very understandable strategy for creating lasting stability.
Flexibility for location: For new or divergent companies, there will always be unknown factors. Despite the most thorough research, your business could develop in quite unexpected ways, some of which will be beyond your control. Even for longer established businesses, market trends can change considerably over the years. Renting allows the flexibility to relocate as and when you need to.
Flexibility for changing needs: Even though you may have found the ideal location, your trading activities could develop in ways even the most thorough business planning could not have anticipated. Renting allows you to stay fluid. As you become clearer about your future needs, you can simply adapt your accommodation to them without the headache of having to enter the buying and selling cycle all over again. It might surprise you to know that larger companies often choose to rent, keeping their options open in case a more attractive commercial property in London becomes available or they are having financial issues.
Business rent can be 'Claimed Against Tax' liabilities: HMRC usually allows businesses to claim business rent as an 'admissible' operational expense for the purpose of your annual return. The amount you declare you have paid for rent is effectively discounted to arrive at your net profits, reducing the amount of tax you would otherwise pay. This is obviously useful for cash flow for any company, especially in today’s challenging economy. Your tax adviser or accountant can advise you on how much less tax your company could be liable for.
Renting means maintenance is someone else’s expense: Being an owner occupier means time and money invested in maintaining the building - whereas renting comes with agreements about the upkeep of the property.
These are just some starting reasons why companies small and large favour renting over buying in both the short, medium and the longer term. Renting commercial property is a tax effective, highly adaptable strategy to protect your cash flow and keep pace with a dynamic market. It allows you to focus on business critical operations and avoid the financial burden of acquiring and maintaining premises.
To view our selection of quality commercial property in London that is available to rent and other selected UK locations, call our multi-lingual team today on 020 7843 3753.