The pros along with cons associated with buying or renting out a warehouse

Enough work in organizing or managing warehouse greater Noida is a hell of a task. The question that would be at the back of your mind would where to avail a warehouse or godown in greater Noida itself.

The commercial estate comes with its own baggage and with regard to warehouse space, you might press the panic button pretty soon. Hold on! No need to panic as here are some tips that would enable you to consider whether renting or buying a warehouse is a worthy move.

Buying a warehouse

Positives

  • Fixed costs- Mortgages are known to have less fluctuation as compared to rental rates. This means that the monthly rate is consistent over a point of time
  • You have better control – If you are an owner of a warehouse it means that you have better control over the property itself. Any renovation or modification to the property decisions can be taken at your own as there is no landlord involved.
  • Equity- Once a business soars to new heights in value, property appreciates and you can keep the property as a mortgage to obtain loans. This works in the same manner as you mortgage your home

Negatives

  • Immediate high costs – In comparison to renting out a warehouse, buying one would cost you high upfront costs. The money needed to purchase property along with renovations would cost you considerably
  • Maintenance bills- A drawback of owning a warehouse is that you are responsible for all maintenance cost that arises from upkeep. The resources or time that you need to invest here would be a damp squib in long term prosperity of your business
  • Financial risk on the higher side- Insurance and property taxes are going to increase year after year and if financial issues crop up you might have to sell it at a lesser rate than the anticipated value

Renting a warehouse

Pros

  • More options- at a general level there are bound to more options when it comes to renting a warehouse than purchasing. More options in terms of the type and size of a warehouse are presented
  • Less time to be spent on management- as a landlord is in charge of the property you do not have to devote time or resources in managing the warehouse.
  • Easy relocation- if the facility outgrows or for some reason you might feel the need for a new location then it is easy to pack up and make a move

Cons

  • Lesser value increases- any commercial warehouse operates on the concept of the annual lease which means once you renew lease additional costs are to be borne
  • No control over the property- the daily activities of your business can be managed, but when it comes to controlling over property it is zero. A property owner is at discretion to increase rents as you may have to relocate
  • Limited growth – In case if your business grows at a rampant pace space available for growth would be difficult. You might have to look for a costly relocation area.

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