You’ve come to the conclusion that you need more space and a modular building seems like the best solution. But is it better to lease or buy?
Is it better to lease or buy a modular building?
When it comes to finding the ideal solution to spatial challenges faced by many off today’s businesses and organisations, a modular building is perhaps the most popular choice. The benefits are plentiful, many of which have been covered in one of our previous articles.
But what if you’re already sold on the idea of a modular building, you’re simply unsure whether it’s better to lease or buy? It might not be as straightforward as you initially thought — or at least it may not immediately appear that way. Thankfully, we’ve compiled three important factors to consider before making that decision.
1) Is buying going to be an option for you?
Let’s kickstart things in a way that gets straight to the point — is full ownership of a modular building really an option?
Many businesses and government entities have clear restrictions on what kind of assets they can purchase. If modular building ownership does not fall within these plainly defined rulings, then it’s likely that leasing will be your only available option. Also, if the land on which your business or organisation resides happens to be leased (i.e. you do not own the land your premises is located) then building ownership may not be the most sensible possibility for any number of reasons.
Either way, it’s important to establish whether or not full ownership of a modular building is even a possibility before anything else.
2) How long do you require the building?
Leasing a modular building is almost always going to be the better option when your needs are relatively short term, say 6 months to 24 months. If you foresee needing that building for a longer period of time, a purchase option may need to be considered.
If you’re altogether unsure, a leasing option provides the best flexibility. Modular building leases can be easily renewed, and it ensures you have the space for when you need it without paying for it when you don’t.
3) Is buying financially feasible?
Whilst full ownership may be the simplest cut-and-dry solution, there’s no overlooking the cost involved in purchasing a modular building outright. This decision needs to be made on the overall availability of cash and the need for that cash to fund other areas of your business — but that’s just common sense. So what about leasing?
Well, leasing is almost always going to be cheaper than buying, and lessers the responsibility of repairs and maintenance than if you owned the building.
On the other hand, it is vital to understand that leasing a modular building does not build equity; and any payments you make will not directly reduce the purchase price of the building, should you decide to buy it at the end of the lease. With this in mind, perhaps a third option to finance the purchase with a bank or other type of financial institution (should you have the borrowing capacity) is the most logical solution.
Regardless, buying and leasing a modular building both have their advantages. Talking with your modular building provider and outlining your particular circumstances is the best way to reach and outcome that suits you.