Purchasing a Building as a Moving Company: Things to Consider
Should moving companies buy their own buildings? With the global economic situation in the state it’s currently in, if your moving company is in strong financial standing and you have a building in mind that’s suitable, then yes, you should buy the building. Rent is quite often money that you watch go down the toilet and although there are times in which it prove advantageous to rent, in the long run, it usually works out better to own the building in the long run.
What do moving companies need to know before buying a building?
Moving companies should be in a strong financial position before purchasing a building for commercial purposes. There are however, other factors to take into account, this way you can perform a comprehensive cost comparison between buying and leasing. Moving companies need to consider the cost of purchasing the building and the host of the other expenses that come with the purchase and ownership of a building for commercial purposes, including:
– Interest on the loan if they’re borrowing
– The cost of improvements and maintenance
– Insurance, rates and taxes
These are the extra expenses that the moving company shouldn’t have to pay for had it continued leasing a building rather than buy one, consequently they should take these into account by performing a comprehensive cost comparison between buying and leasing.
Moving companies also need to factor in growth when looking into their options concerning the purchase of a building for commercial purposes. Although they’ll perform improvements on the building, should they choose to sell the building at a later point in time, since the improvements will have been made for a moving company they’ll prove superfluous for another company to utilize. Therefore, if a moving company is to purchase its own building, they’ll need to ensure the building is large enough to accommodate the growth of their business over a certain amount of time. Outgrowing a building usually proves financially disadvantageous.
Buying a building: Finance or savings?
Moving companies, like all businesses, have two choices when it comes to purchasing a building for commercial purposes; apply for finance or save enough to purchase the building outright.
Applying for finance is a popular option, but the company in question stands to pay significantly more for the building as interest will have to be factored into the total cost. Saving to buy the building outright, or at least saving to put a substantial down payment on the building and then taking out a loan for the remainder, is the better option for moving companies buying their own building, so how to save for the purchase of something like a building?
Once the moving company has established roughly how much it will cost them to purchase a building that’s large enough for their commercial interests, including adequate space in which to grow into over the years – don’t overlook the importance of allowing adequate space for business growth – they can set themselves a saving target and utilize handy online tools. The saving calculator that enables business entities, as well as individuals, to a) work out how much their savings will be worth at a future point in time, or b) work out how to reach their savings target, is a handy tool to use, one that many moving companies have found indispensable with regard to reaching their savings goals. Obviously moving companies will need to take a long, hard look at their books, but they’ll find that saving to purchase a building is often just as feasible as applying for a loan.
About the Author :
MoneyVista is a financial firm giving out reliable services related to budgeting, borrowing, and investing money for future use. They do this through their productive use of saving calculator.
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