The ongoing pandemic has brought plenty of chaos to the commercial real estate market worldwide. With more and more people working from their homes, instead of the offices, it’s only natural for the same trend to be present in Detroit, too. And while this city has seen a rise in vacant facilities, some say that, once the virus gets under control, the largest place in Michigan will, once again, become one of the hottest commercial markets in the States. If looking to expand your business here, now’s the ideal time to think about renting or buying office space in Detroit! With the wider range of options available, you’ll be able to choose a property that perfectly suits all your needs.
Renting office space in Detroit
The whole leasing process can be extremely complicated. However, it can also come with plenty of perks. Ultimately, whether it’s right or not for you, you will have to judge for yourself. Below you can find some information that should help you decide in a somewhat easier way.
Rent a property for lower initial costs
While purchasing requires you to make a down payment, the same isn’t true for renting. Most of the time, the initial costs of leasing a Detroit commercial property include only a deposit. Even though the exact amount varies, the unwritten rule says that it typically equals one monthly rent.
It’s quite flexible
If you happen not to be as satisfied with the place you’ve found, once the lease is up, you can quickly move to another one. If your business grows bigger, you can opt for a larger facility. And if it doesn’t do so well, you can downsize, too. Either way, in case of relocations, you will need help with the transfer to the new space, and professional commercial movers are there to provide it.
It gets you access to Detroit’s high-end office district
You might not be able to buy a higher-end property, but you could probably rent it. Placing your headquarters in the heart of Detroit CBD (Central Business District) could prove ideal for the company.
Rent and utilities count as tax deductibles making leasing a more affordable option at the end of the day.
There should be no maintenance costs as landlords are in charge of everything. This leaves you with more time and more funds that are better spent elsewhere.
- It isn’t affordable long-term. Once a certain number of years have passed, purchasing a Detroit facility becomes a better option.
- Rent is bound to increase over time, especially if located in the prime spot.
Buying office space in Detroit
Just like leasing, buying also comes with its perks, as well as cons. However, if interested in the particular place on the Detroit office market, inform yourself about commercial real estate before the actual purchase.
Safe and stable costs
You shouldn’t worry about your monthly payment increasing over time. There will be no fluctuations either! Taking a fixed loan means that your last payment will remain exactly the same as your first one. No surprises whatsoever!
The property will build equity over time.
All property, commercial and residential, increase in value throughout the years. Or rather, in real estate words, it builds equity. Considering the increase of worth, the possibility of buying an office space in Detroit and selling it after some time could seem like a smart investment move.
The ability to rent parts of your facility to other people
If you do not need all that freshly bought space, you can think about leasing some parts of it to other people. Bringing new tenants to the place can even help you partially cover the loan.
Your name on the deed and fewer restrictions that come with it
Since you would be the one and only owner of the property, you would have a bit more freedom when it comes to decorating and remodeling the space. Of course, it’s worth noting that owning a commercial property in Detroit could come with a set of restrictions imposed by the local authorities. Therefore, before purchasing, make sure you speak to someone who’s familiar with the matter.
Despite specific difficulties that come with the whole buying process, you should be able to transfer your business to the area easily. And since you’ll probably be transferring equipment that needs to be protected while moving, acquiring moving insurance is essential!
Tax deductions for having a Detroit office
Similar to renting, owning a property in Detroit also comes with some kind of tax relief. Unfortunately, while leasing allows you to deduct the entire rent and utilities, the same can’t apply to the monthly mortgage payment. What you can do, though, is remove the mortgage interest from the tax calculation. Not ideal but, still, better than paying the whole amount.
- The initial costs are significantly higher, considering you would need to make a down payment. This can make a substantial dent in one’s budget.
- Depending on how much in funds you can afford to spend, pricier properties located in better parts of the city could be off-limits.
- It would be your responsibility as an owner to take care of the maintenance costs, along with the mandatory property tax.
- Mortgage can stop you from moving your business to another place.
Should I rent or buy a Detroit office space?
This is something no one else can decide but you. When you think about it, it all depends on numerous factors, such as your personal preferences, your budget, and your credit score. However, one thing is for sure: whether you choose to rent or buy office space in Detroit, you won’t be making a mistake considering there are more benefits to both than there are disadvantages. To be completely honest, just the simple change of scenery as a start is unquestionably going to be beneficial to both you and your business.