The economic undercurrent
The pandemic has had an adverse impact on the global economy. One can witness the effects on the cash flow, economic cycles, asset acquisition and business sustenance. As a result, it is quite unlikely that businesses will dip their feet into capital burdening assets. Even if they do, it can cause massive stress on the liquidity of the company.
In this disrupted market, many trends have shifted, and one of the biggest ones is the unconventional work setups and approach towards commercial spaces. Thus, for investors and business owners, leasing a property is a smarter choice. Leasing allows one to control the cash flow and increase the tendency to burden other operational costs. Moreover, it provides the scope to structure payments without draining the treasury of a business. Especially in times like these, it is essential to be calculative about asset acquisition.
The flow of advantages
It can also be highly beneficial for emerging businesses where the revenue streams are still gradually settling in. From a financial standpoint, the purchase of a new commercial property would demand a higher investment than that of a lease wherein the capital would be towards a security deposit at the highest. Secondly, the maintenance cost is usually the responsibility of the owner, rather than that of the person leasing the property.
Apart from the economic benefits, it is also great for expansion. The buying of a commercial property can restrict the growth prospects in this volatile market. If one expands the business or the workforce strength, they have the benefit of switching to another property that fits their requirements better. This scope of flexibility can be of a vantage point. Additionally, the constantly changing market affects the real estate prices causing uncertainty in return on investment. Therefore, if one discovers a commercial property in exact synchronisation with the business’ current needs, they should lease it. Leasing it out will protect the venture from facing the impact of the wavering market.
The safety net
Anyway, every business, irrespective of their nature has had to face the blow of COVID-19 and the decline in both demand and supply of products and services, thus, tying oneself to one property, bearing its operational costs, maintenance charges while the teams continue to function remotely can cause unnecessary financial strain.
Hence, keeping in mind the financial standpoint, market volatility, necessity to secure cash flow, the scope of expansion and the general unpredictability of the world, it is a wiser choice to lease a commercial property.