Five reasons why businesses with steady cash flow should consider buying an office space - psgroup
By Chandan
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If the rental outflow turns out to be almost the same as the cost of buying an office space, it is judicious for businesses with steady cash flow to consider purchasing a unit of their own. If the current location of the business is unlikely to change for a decade or so, it is better to buy an office space that can accommodate the growth and expansion plans of the business for the coming years. Owning an office space leads to better control over operating expenses and allows more freedom to carry out necessary improvements to the property. Office spaces in New Town have emerged as the preferred choice as the units are well-designed to meet contemporary business needs, with adequate ventilation and natural light for energy conservation. Here are the prime reasons you should bear in mind while assessing the need to buy your own office space within a specific timeframe.

Office spaces in New Town

The prime location has well-developed, modern infrastructure and good connectivity options to all parts of the city. Being affordably priced to fit all budgets, office spaces in New Town offer all the modern facilities and amenities one needs for a conducive work environment that ushers in positive energy. Available in various sizes and floor plans, these are suitable for small, medium and big businesses. Owning an office space here builds the image of the business in the eyes of clients and patrons. It becomes a matter of prestige and privilege to operate from your own office space – an address you can flaunt with pride.

Building equity

When you purchase a commercial space, you are able to build equity and it is used as a collateral in seeking loans. The business is perceived as a stable player with an asset of its own and banks are quick to sanction loans in case you wish to go for an expansion of your business. The acquisition of additional funding becomes easier when the company anticipates the need to borrow funds to open new branches in new locations. If you foresee significant future growth that will require investors or loans, purchasing office space is one of the most sensible decisions that becomes an anchor for borrowing opportunities and proves financially rewarding in the long-run. If you wish to sell it in the future, you have an asset that gives you handsome appreciation. To cite an example, office spaces in New Town have recorded impressive growth in recent years and delivered handsome returns.

Fixed or stable need for space

Businesses experiencing or anticipating accelerated growth will generate a need for more floor space, prompting many companies to prefer the rental option. If your need for office space is ever-growing, it is perhaps not appropriate to opt for a finite floor area in a building. But when your business has stabilised and your need for space will be met by setting up additional branches elsewhere in the city, buying office space is the important next step for the company to move along the trajectory of growth. In case you are planning to set up your corporate office or headquarters for a decade or more, buying an office space appears financially attractive.

Profitable established business

Once the business has achieved steady revenues that are unaffected by economic cycles or slowdown, it shows there is a consistent revenue stream and profitability that should make you think of fortifying the asset side of your balance sheet. Investing in an office space is a wise move in this regard. With office spaces for sale in New Town, trying out a feasible option is the best thing to do.

Steady cash flow

If the business is growing and yielding profits with robust cash flow and little debts to repay, such entities should ideally prefer buying an office space. For an entrepreneur, cash flow is critical because it gives a clear insight into whether the long-term debt can be serviced without any defaults. The advantage of borrowing at a low-interest rate becomes possible where the business credentials are fully supportive. In case you are left with extra office space, you have the option to rent it out to augment the revenue inflow.

Cutting costs

Since controlling costs is a primary objective, property rental is a major fixed expense that can lead to some improvement in the financial health of the business if you own the office space. Besides, rentals get hiked after a couple of years, leading to the additional financial burden, whereas the mortgage outflow remains steady throughout the tenure of the loan and there are certain permissible tax deductions allowed on interest payments every year.

The landlord could change hands and the new owner could turn out to be unpredictable as he has the power to revise the rent and restrict the use of amenities. Having your own office space leads to controlling the largest fixed expense and you can customise it to maximise operating efficiencies. There is room for enhanced profitability even if other expenses escalate due to inflationary trends in the market or situations beyond control. Businesses need to properly evaluate their particular needs and circumstances before making a long-term decision.

More amenities

When you lease office space, there are certain limitations or restrictions imposed. Access to the amenities remains basic. Office spaces for sale in New Town are loaded with amenities. When you own office space, you have greater control over the space and you get access to all the amenities on offer and the same benefits are shared by the employees.

Apart from these compelling reasons in favour of purchasing an office space, it is wise to realise that the rent you shell out does not lead to any asset creation whereas having an office and servicing its monthly installments makes you feel you are creating an asset that can sustain you during the period of retirement. Once you decide whether you can bear the burden or not, swanky office space in the city should be a priority on your list of purchases.

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