Every business that deals with large quantities of goods or merchandise needs a warehouse. Whether you are an online retailer, a manufacturing company, or a construction company, for example, regardless of your industry, you need suitable locations for storing products that are either manufactured on site or sold or shipped from there.
In addition to the individual requirements for each type of warehouse, all business owners face the same question: Should I rent or buy a warehouse? What are the pros and cons of each option? To help you find the right answer and support you in your decision-making process, the experts at Larbig und Mortag have put together a helpful overview.
Arguments in favor of renting a warehouse:
The cost of renting a warehouse can vary greatly depending on location, size, facilities, and condition. On average, you can expect to pay between 5 and 6 euros per square meter. However, there are also rental prices that are significantly higher or lower. Anything from 2 to 10 euros is possible. And since there are fewer regulations and laws governing the rental of commercial properties, you should pay close attention to the terms and conditions and details specified in the rental agreement.
The following points speak in favor of the rental option:
- The initial investment costs are much lower than when buying. Renting a warehouse is the right choice, especially for smaller or newly established companies that do not have a lot of equity.
- As a business owner, you remain more flexible when you rent. If it is not possible to accurately estimate in advance how your business will develop, it is easier to adapt the storage situation to business forecasts. For example, by terminating or extending the lease agreement, depending on what the figures say.
- The economic risk is lower with a rental agreement than with a purchase. If repairs, maintenance, or renovations are necessary for a warehouse, for example, the owner is responsible for the costs.
Arguments in favor of purchasing a warehouse:
As soon as sufficient equity capital is available and financing is not a problem, it makes perfect sense to consider a purchase. The investment is particularly worthwhile if long-term use of the warehouse is planned and foreseeable.
Arguments in favor of purchasing:
- After around 10 years, the total monthly payments for a rental property are usually so high that purchasing a property makes financial sense. The purchase price of a warehouse can range from $300 to $1,500 per square meter.
- As the owner of a warehouse, you have complete flexibility to make structural changes, which is usually not possible when renting. If, for example, the business is to be expanded and the purchased property is large enough, the warehouse can be easily expanded. Adjustments can of course also be made to the warehouse itself.
- If you are thinking long-term and the regional real estate market is developing well, you can expect to make a substantial profit if you decide to sell or re-let the property in the future
Experts help you make the right decision: At Larbig & Mortag, we know that there is a lot to consider and take into account when looking for a warehouse. We would be happy to advise you and work with you to draw up a list of pros and cons for renting or buying a hall. Our team looks forward to your call!
