Picture this. You just qualified for a business loan to help your growing enterprise move out of your increasingly cluttered home into a part of town with more vibrant opportunities. Should you rent a space or, perhaps, take out more business banking loans so that you can outright buy new premises?
The decision of whether to rent or buy one’s business premises is probably one of the most debated in entrepreneurship circles. Both the “pro-renting” and “pro-buying” camps have their staunch advocates, and there are spirited discussions advocating either approach. However, like many other things in your entrepreneurship journey, the question of which path is best is frustratingly subjective. In all cases, the best choice depends on your business goals, the kinds of risk you’re comfortable with, and prevailing market conditions.
For any big business decision, it helps to have options. Becoming a Maya Business user lets you apply for a Maya Flexi Loan, gaining you access to up to PHP 2 million in instant funding within 3 months. With a Maya Flexi Loan, you can cast a wider net and find more real estate rental and purchase options that match your small business’s growing needs. To make your decision even simpler, we’ve prepared a breakdown of the pros and cons of renting and buying below:
Pros of Renting Your Business Premises
- Lower Upfront Costs. In most cases, initial costs are substantially lower when renting, as you typically only need to cover a security deposit and the first few months’ rent payments. This makes renting worth considering even if you have the money to buy since you can preserve cash flow for other business activities.
- Renting offers greater flexibility to relocate as your situation changes. Since you have a smaller investment, you won’t be tied down as much as when you own the premises. What’s more, you can often negotiate with your landlord for more favorable terms, should you offer a longer commitment.
- Maintenance and Repairs. Major maintenance and repair responsibilities often fall on the landlord, reducing your operational burden and expenses. This makes it easier to focus on key parts of your business rather than on property management.
Cons of Renting
- Lack of Equity. Renting does not build equity nor does it allow you to benefit from typical year-over-year increases in real estate value. This is an especially important point, as ideal business locations tend to become more valuable with time. Unfortunately, your monthly rent payments will instead contribute to the landlord's investment, not your own.
- Limited Control over the Property. As a tenant, there will be limits on how much you can modify a space to fit your business’s needs. Landlords are generally not motivated to allow extensive modification, limiting the signage footprint and other customizations that could set your business apart.
- Potential for Rent Increases. Rent can increase with lease renewals, and this is a given for almost any profitable location. These changes can impact your long-term financial planning and may pose challenges to business continuity.
Pros of Buying Your Business Premises
- Equity Building. Unlike rent, mortgage payments contribute to an asset that can become worth more in time. For that reason, owning your premises may give you a hefty future advantage since you can use your real estate to secure financing or sell it off to fund new ventures.
- Ownership gives you full control over the property, allowing you to customize and renovate to meet whatever needs your business has. This makes purchasing worth considering if your business is potentially disruptive to its surroundings.
- Stable Costs. With a fixed-rate mortgage, your monthly payments generally remain stable, avoiding uncertainty and helping long-term financial planning. In comparison, rent increases tend to be unpredictable and may sometimes be more expensive than mortgages over the long term.
Cons of Buying
- High Upfront Costs. Buying a property typically requires a substantial down payment. If you can’t buy the property outright, a large business banking loan might be needed.
- Maintenance Responsibilities. Even after your mortgage has been paid, ongoing maintenance is needed to preserve your investments’ value. As the owner, you are responsible for all maintenance, repairs, and property management, all of which are time-consuming and potentially distracting from your core business activities.
- Less Flexibility. Owning a property ties you down and makes it difficult to relocate quickly. Even in the best of times, selling the property or finding tenants to take over can be time-consuming and costly.
Get the Business Premises You’ve Always Dreamed of with a Maya Flexi Loan
Your real estate choices can make a huge impact on your business’s operations and profitability. For that reason, it’s good to have reliable financing so that whether you rent or buy, you can choose the locations that make the most sense for your growing business. Thanks to its easy terms and amazing flexibility, Maya Flexi Loan has emerged as a business loan Philippine businesses of all sizes can depend on for their real estate needs. Sign up for Maya Business to enjoy up to PHP 2 million in instant liquidity with a Maya Flexi Loan.
Signing up for Maya Business grants you a high-performance Maya Business Deposit account for settlements, everyday money transfers, and more. With its industry-leading 2.5% per annum interest rate, your Maya Business Deposit funds will earn PHP 25,000 yearly for every PHP 1 million. Maya Business Deposit also lets you save on partner and supplier payments with free InstaPay and PESONet transfers.
As mentioned previously, becoming a Maya Business user also qualifies you for an exclusive Maya Flexi Loan offer valued up to PHP 2 million in just 3 months. Use your customized loan to rent or buy your dream business space. To receive bigger and better loan offers in the future, just keep using Maya solutions and use Maya as your primary processor for all wallet and card payments.
Send in your Maya Business application today and secure the business location you’ve always wanted with a Maya Flexi Loan.
