To Rent or To Buy – Here’s what a company should choose!

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As the commercial centre of the country, Mumbai is emerging as one of the most sought after cities by business organisations. More and more companies are setting their foot in the city, which makes it an obvious question of whether it’s better to buy real estate for your workplace or get it on rent. For nearly a decade, the answer has been buying due to decreasing property prices. But, the tide has changed. Buying an office can be cash-intensive, increases responsibility and requires high-maintenance so renting can be better than buying an office. This article seeks to give detailed information related to the upper hand that office on rent in Mumbai hold over buying the office space.

Following list has been made on the pros and cons of buying offices vs securing offices on rent in Mumbai.

Benefits of buying office space:

  1. Property ownership is a long term investment

Once you have bought a workplace, the location will be available to you for decades to come, unless you decide to sell it. This will vastly reduce any insecurity concerned with being evacuated mid-business cycle.

  1. You can lease a part of your property and gain extra income

This option will only increase your profit. Once you have made a long term investment, you can set foot in renting the place to someone else. Apart from maintenance your responsibilities will be limited, while you will gain regular rental income from the tenant.

  1. You will have the freedom to design the property as per your desire

A workplace that has been bought will not come fully furnished according to someone else. As the property owner, you will have the freedom to be creative with the designs of the workplace.

Disadvantages of buying office space:

  1. Your financial commitment towards the ownership of property will be enormous

This is one of the biggest disadvantages of buying an office space. The cost of buying office space is enormous and requires gigantic financial investment and commitment. In the future, if due to any reasons, the business operations stop, you will be responsible for selling the space no matter what.

  1. As business owners, your operations and innovations will be more restricted

The business environment is highly dynamic. Therefore, if you seek to make enormous changes in the office and its outlook, it will incur huge costs on you. In contrast, you can quite simply relocate to another workplace if you rent your office space, once the lease term is over.

Benefits of renting office spaces:

  1. You will face lesser limitations and restrictions if you opt for office on rent in Mumbai

As stated above, if you want to grow your business or change the outlook, you can easily rent another office space once the lease term will be over.

  1. Repairing, remodelling and maintaining responsibilities will fall into the hands of the renter

As the owner of the property, it will be the landlord’s responsibility to repair, remodel and maintain the workplace while you, as a tenant, can continue with your business operations.

  1. Advantage of establishing a business in a richer location 

The location of a business organisation is highly important in attracting new employees and clients. In the present market, it will be difficult to buy office space in a rich location.


  • No one-time investment 


Buying a workplace in Mumbai would require a huge investment, which could be saved by renting a place, which requires a significantly smaller amount as the security deposit. You can channelize this saved money in the business as working capital.


  • No tax payments


Renters do not have to pay any property taxes, which can be burdensome for buyers because property taxes can cost a considerable amount depending on the value of the property. 


  • Protection from Changing property value 


Property values may go up and down with the changing market environment, which can affect the homebuyers. However, renters are not adversely affected.


  • Flexibility to downscale 


Businesses come with their own share of uncertainties. So in the case of slowdown, renters have an advantage that they can move to a more affordable office space. 


  • Lower insurance cost 


The renters can also have an insurance policy, just like the owners. But the renter’s insurance policy is much cheaper as well as it covers nearly everything that is owned like furniture, computers, and other valuables. 


Your office should be devoid of distractions and disruptions as much as possible. It is only reasonable to assess various factors related to business operations before deciding whether to buy or to rent office space. Moreover, the business environment is highly dynamic. Therefore, in the end, opting for office on rent seems more viable than making long term commitment and investment.

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