When choosing office space, most business owners think about the location or the interior design. However, one of the most fundamental questions to consider when approaching the decision is whether to rent or lease. While many people think of these two terms interchangeably, they are actually very different arrangements that can have an impact on your business.
A rental agreement is typically a month-to-month contract that is renewed automatically at the end of the month unless the landlord or tenant specifically says otherwise. By contrast, leasing office space is a longer commitment, usually with contracts for six months or a year. Leases are not automatically renewed, but they can be renegotiated or changed to a rental agreement.
A rental agreement provides more flexibility. However, rental agreements are also subject to change. This means that the landlord can raise the rent or change other factors of the agreement at any time. Since a lease is a longer commitment, the terms cannot be changed throughout the duration of the contract, which provides increased stability.
Although the month-to-month contract may appeal to business owners for its flexibility, the unpredictability of these contracts can make it hard to plan ahead. Moreover, if the terms change unexpectedly, the property may become unaffordable or impractical. For this reason, many businesses will benefit from leasing office space for their business goals.