Lease property catch on with startups - Bangalore

Bangalore : When it comes to finding an office space or small business premises for rent or a lease for startups is a key step in starting or expanding new business, the cost is a major concern. A majority of start-ups may not be able to chunk their huge investment in getting office space for rental property in Bangalore. But most of them will prefer a lease property. Because new business may already realize the benefits of leasing, including conserving their cash and tax benefits.

Why Bangalore start up choice property lease?

Bangalore, being the second fastest growing city in India, the competition is getting tougher and the prices of real estate are sky scraping. Owning an office spaces is one of the fundamental considerations for any business. The office spaces or business premises will add value to the business and also helps in business function. Startups typically have little leverage with landlords. While starting the business all should compare the economics of leasing and buying, in that leasing makes more sense.

Many small business startup owners can only afford to lease retail, when they are just starting out. Because rent often consumes a large part of their monthly budget. But in case of lease there are many advantages. Let us discuss about big advantages of Leasing.

• The main advantage of leasing lies in your business is ability to manage assets without outlaying essential cash.
• No need of down payment: Typically, you need a down payment for buying a property which takes a huge lump out of your start up budget. By leasing, no need of down payment that you can use it as capital for growing your business.
• Property management will undertake all repairs: Suppose you have a problem with an air conditioner, then in your lease space you can intimate to a property manager and wait for someone to show up and fix it. But in case you own the property then you need to spend thousands of money on repairs.
• Short term option: As your business expands, the more employees will increase and it may grow out of its space. By signing a lease of a few years, you will have an option to change for a new place which suits you.
• Leasing is a less capital more exhaustive than purchasing. By that you can save a lot of money.
• Reduction of capital assets has different taxes and financial reporting treatment of normal business expenses. Lease payments are deliberated as an expense rather than assets, which can be set off against income when calculating taxes.
• Leasing will provide more flexibility to a business.

Leasing has also some disadvantages. So all should do careful research before signing on the lease agreements.