Finance

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Are you a new business owner looking to find a workplace, but you’re unsure whether you should purchase or rent an office space? If so, you’re not alone.

Many small business owners are confronted by this dilemma. Is it better to buy an office area where you can establish your business, or are you better off renting a space?

Unfortunately, there’s absolutely no 1 size fits all answer to this question. The best option for you and your company will probably depend on your financial situation, your plan, your industry, and much more.

For most small business owners, however, leasing office space is often the safer choice.

What makes leasing the more attractive and feasible solution for start-ups and smallish businesses? Here are a couple of benefits to renting office space instead of buying it.

1. No mortgage

When you’re not locked into a mortgage loan, this frees up capital to put it where it is needed for additional expenses like R&D, marketing, personnel, etc..

2. No Deposit

When you get a lease on an office, there is no humongous deposit! Leasing takes a smaller quantity of money up front — typically the first and last months’ rent. When you purchase an office space recommended by retail property agents, you will have to put down a large fee between 10% to 30 per cent and lots of new companies or startups just don’t have this.

3. Flexibility

At the end of your current lease term, you may easily decide to expand or not. It’s far simpler to relocate if you want to find a large space for your growing business or a place that suits your budget if you’re renting your current space, rather than owning it. 

4. Tax Credits

When you lease office space, your monthly payments are tax-deductible as a business expense.

5. Prime Location

Renting office space in the more expensive cities like Melbourne is generally much less expensive than buying. Plus, the location of a business can make a big difference in a firm’s prospects. If your small business is dependent on image and location, then a prime location is key. If you are in the sports business that deals with walk-in customers a lot, for example, it might worth your time to check if places such as the Melbourne Stadium has spaces to offer for you.

6. Fewer Responsibilities

When you are leasing office space, maintenance, repairs and alterations are usually cared for by landlords. Should you own your property, this becomes the problem. When you lease, you can focus on running your business rather than coping with the nuances of managing a house.

7. Quick Move-in Time

When you lease, typically there is a short lead-time to maneuver in. (But if you are building from the ground up, then it could add some extra time until you can move in.)

8. Free Time

Any type of property ownership includes a lot of headaches! The leasing option frees up your time as a busy small business owner to focus exclusively on running your company.

Whether you choose to lease or buy your next office area, there are pros and cons to each. Make sure you thoroughly research your options before making your decision.

What If You’ve Made The Decision To Rent?

If you do choose to lease an office instead of purchasing, below is a helpful guide that can show you step-by-step the way to procure the rental to an office area for your company.

Step 1: Determine Your Financial Plan

Before you can also begin looking at office spaces, it is important to know what your budget is. Knowing your budget will allow you to restrict your choices up front based on what you can realistically manage.

Step 2: Research On Other Office Spaces

Research different office areas available in your area and have a tour. It’s best to observe the space in person to have a look at the area, make a list of your potential neighbours, and also to visualize what it might really be like to work there. As some buildings in Melbourne rent out spaces as formal venues, you might want to avoid being located next to these as it can get noisy.

Step 3: Pick on an office

Out of those different offices areas you toured, pick which one is right for your business. Listed below are a few questions to ask yourself:

  • Is the location convenient for the customers?
  • Is the location suitable for you personally?
  • Is your location right for my employees/potential workers?
  • Is there parking available?
  • Is it cheap?
  • Can it be located near shops (banks, post offices, daycare, etc.) and other conveniences which are essentials for you?
  • How far are you allowed to change the decoration and design to personalise the space?
  • Is there a kitchen you can use?

Step 4: Leave room to grow

Consider additional distance when you’re planning to grow your team. As you’re growing your business, you may be able to sublease the extra space to another tenant for extra income. (Remember, the original lease will need to include sublease options up front.)

Step 5: Determine all prices

Make sure to look at all the expenses associated with the move. Calculate the entire price of rent, utility bills, moving costs, expenses for construction and/or office interior design (if any), etc. just to make sure that you won’t be bombarded by unpleasant surprises along the road.

Step 6: Get your financial documents prepared

Before you are able to rent office space, building owners will want to determine if you can pay the rent! Normally, the operator will require a security deposit. Start collecting significant financial documents such as tax returns, bank statements, financial references, along with a bank letter of credit to show that you are able to cover the expenses.

Step 7: Finalize special requests

Do you intend on having the office area revived before you move in? Does the contract contain set up of wifi or some other particular agreements? Ensure these details are covered before the move in date.

Step 8: Move in

Move into your new place and make it your own! Make your workspace imaginative and distinctive by adding your own personal touch.

Follow the following steps for renting office space for your small business and you’ll be on the path to success!

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Four years ago, Australia’s resort was fighting as an inflated currency saw the competitiveness of the tourism sector relative to international counterparts drop, feeble financial conditions outside of mining impacted both corporate and leisure travel and reduced levels of investment supposed there was little in the way of forcing new or updated stock from which to bring travelers.

Really, in the two years coming to March 2014, the Australian Bureau of Statistics figures indicate that overall takings from hotels, motels, and serviced apartments fell.

Now, things have changed as a weaker dollar has seen people from the overseas flock in and Australian travelers opt for more optimistic encounters. Within the 3 years to June 2017, data from Tourism Research Australia (TRA) suggests that international and domestic visitor nights climbed by 22 and 14 percent respectively. As a result, TRA reckons overall journey cost will have grown by 21.3 percent from $107.9 billion to $130.9 billion over the 3 years to 2018.

Thus, resorts are fuller and ready to control more. Over the year 2017, real estate services company CBRE says federal occupancy rates edged up 0.9 percent to 76.2 percent, whilst room rates climbed up by 1.8 percent. Hotels on tourist destinations such as this accommodation at Hobart Waterfront have benefited significantly from this surge of tourism.

Moving ahead, expectations are high. In the most recent prediction, TRA said international visitor nights could increase with an average compound rate of 6.4 percent over the five years into 2021/22. National travelers, meanwhile, would increase their visitor nights by a small but respectable average yearly rate of 2.3 percent.

Unsurprisingly, development activity is ramping up. At $3.455 billion, the dollar value of short-term accommodation buildings approved for building within the 12 months to November last year was up 10.7 percent over the year before and by over a third compared with its level three years back. At $3.268 billion in the September quarter (ABS data), the pipeline of building work yet to be achieved on hotels and other short-term accommodation buildings stood at record levels and was up nearly fourfold in four years. Between now and 2022, CBRE expects Perth, Melbourne, Brisbane, and Sydney to add 37, 34, 24, and 23 percent to their stock respectively.

Many factors are driving this. The value of the Australian dollar has improved lately but remains below its level many years ago as it was above parity with the US dollar. This makes Australian traveling relatively cheaper to both overseas visitors and locals alike. An improving world market also bodes well for the two global corporate and leisure travel. In travel destinations in Australia, not only hotels but other segments within the tourism industry have shown growth in earnings. One such example is the helicopter flights on Wineglass Bay, which have seen a steady increase of customers in the past year alone.

Beyond that, Carol Giuseppi, chief executive officer at the accommodation industry advocacy group Tourism Accommodation Australia, pointed to other factors.

First, Australia has inked several Free Trade Agreements over recent years, thus facilitating greater global trade flows and underpinning higher levels of requirement for corporate travel. This includes agreements with all our three biggest export destinations (China, Japan, and South Korea) along with the recently announced deal between the 11 remaining nations involved with the Transpacific Partnership.

Connected to this is an expansion of aviation accessibility and capacity into and out of the country. An agreement reached in 2016 between Australia and China — our largest source of international tourists on nights stayed basis — means Chinese airlines now have unrestricted access into Australia. Last September, meanwhile, US carrier United Airlines unveiled plans for new long-haul flights straight from Houston to Sydney. All this is fostering capacity to attract more travelers in to enjoy the gems Australia has to offer, such as this luxury day spa in Tasmania.

The additional element is that the continuing improvements in making a smooth, automatic encounter for travelers (inclusive online visas, multiple entry visas, the roll-out of Smart Gates and trials of biometric processing).

For your property and construction industry, this raises two points. The quantity of work from the pipeline will induce significant opportunities for contractors, designers, project managers and others involved in new development.

Beyond that, interesting questions encompass that markets provide opportunities for new accommodation offerings.

Boom period in new building

As stated above, builders and others are set to benefit from elevated levels of building work in resorts amid a massive pipeline of jobs and an insufficient indication of a slowdown in new works. In Tasmania, for example, new hotels will appear to compete with existing hotels which have built a fantastic reputation such as this Storytelling hotel.

Benefits will be spread across all major markets. With over 6,000 rooms expected to be delivered between now and 2022 (CBRE prediction ) plus a Victoria-wide pipeline of work ($630.9 million) which is up fourfold in a couple of decades, hotel builders in Melbourne is going to be kept busy for many years. Likewise in Sydney and Brisbane, which are equally expected to add amounts equivalent to about a quarter of the stock (greater than 5,000 rooms and 3,000 rooms respectively) and where the pipeline has increased fourfold in four years in the case of New South Wales and from three and half times over a couple of years in the event of Queensland. Adelaide and Hobart also have decent pipelines.

Perth — and indeed all Western Australia — is equally interesting. With nearly 3,000 rooms scheduled to come online between now and 2020 and a raft of quality resorts in the pipeline, construction sites with giant equipment such as the drake low loaders will very likely be active. As mentioned below, but a worsening glut of inventory may impact the potential for new improvements after the present cycle of action winds upward.

Takeovers, amazing resorts, and Airbnb

Beyond market conditions, there are other interesting developments.

One is the proposed $1.2 billion takeovers of Mantra Group by French outfit Accor — one of the largest hotel operators in the world (subject to regulatory approval). If this proceeds, the nation’s two biggest hotel chains will combine forces.

Secondly, the expansion in the millennial population might precipitate a change in resort design toward brighter and funkier offerings. Millennials, as it was stated, are more attracted to ‘active’ experiences and that bolder designs may be more conducive. Whilst hotels in Australia were yet to dabble in this region, he says the market is waiting for somebody to ‘have a punt.’

Finally, there is Airbnb and the proliferation of ‘quasi-hotel’ commercial operators renting or purchasing up flat inventory for supplying on the short term marketplace to travelers. This concerns licensed accommodation providers who run in commercial zones, pay commercial as opposed to residential prices and has to abide by regulation with regard to safety and public/consumer protection.

While stopping short of stating what effect this was having upon growth choices, Giuseppi claims the impact of short-term letting by international visitors to Australia was significant.

Whilst the lodging sector doesn’t have any problem with people letting out spare rooms in their own houses, she says that there are worries about commercial corporations working on a non-level playing area. 

Australia’s hotel industry is experiencing strong changes. For builders, land developers, and even providers of construction services such as crane hire companies alike, this information presents significant opportunities.

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Home buying can be a trying process, but if you throw two distinct opinions in the combination, it may be downright painful. Perhaps you’re dying to get a cute house in the suburbs. You could envision living in a farmhouse-esque interior design style and bringing up your children in a quiet, safe environment. Your partner, however, enjoys the notion of having a property right in the middle of a bustling city street. These disagreements can make roadblocks in your way to coming at the ideal house.

With low stock and increasing home values in hot home markets, you need to act fast once you find your dream house. Do not allow a stalemate with your partner permit you to overlook. Have a look at these pointers that will assist you to get on the exact same page as your own honey and maintain your home search from turning right into World War III.

Make Independent Must-Have Lists

Your best shot in a compromise would be to learn what you and your partner have in common. A prominent Texas-based realtor and one of the few Dave’s Endorsed Local Providers (ELPs), had the chance to work together with married couples and asked each individual to list out their best 10 must-have attributes alongside their top 10 fantasies.

As it has been expressed, your real estate agent will thank you for creating these lists individually, independently of one another, then if they don’t possess five common things on their list, I make them go to 20. That way, the realtors would be able to locate five common things which are really significant to their clients (you) which in turn would be used to serve you better. Even better, some of these agents can also be a specialist retail valuer, helping you to decide the value of your property down the road. Find these types of agents to help you in your process.

Start crafting your list and also have your partner do the same. Compare the lists and determine a handful of your own criteria (location, number of rooms, size of the garden) which are significant to the two of you. These agreed-upon attributes will act as the base of your home-buying discussion. If you and your partner start the house search on the shared ground, you will be more inclined to compromise down the street.

Take Your Emotion From the Budget

House-hunting couples often disagree on just how much money they ought to spend on a house, according to a Facebook survey. Are you supposed to choose a greater mortgage for a house that you will live in forever? Or would you go through the traditional route and get marginally smaller digs? Anyways, if you are thinking of staying for the short term and you would want to invest in better homes, it is worth it to conduct a property valuation on a prospective property to know how it will fare throughout time.

Do your very best to take emotions out of the equation and examine the facts. Your monthly payments must be no longer than 25 percent of your take-home pay. Veto any dwelling that does not fall within that budget. Do not get caught up imagining vacations and family parties at an enormous, lavish kitchen. A forever home will not be yours forever if it’s out of your budget.

As an example, one newlywed fell in love with the house design of an expensive property that she believed was in her budget array, while her husband preferred a house that has been roughly $10,000–20,000 less. They purchased the more expensive residence but just lived in it for a year prior to leasing it out. Despite being qualified for the loan amount, Jessica recognized once they moved in the home payments were too large. As time moved on, the home started draining them of each cent.

Finally, she and her husband needed to get rid of it –learning a difficult lesson in the procedure. She had expressed that should the house be cheaper, they would have managed to keep the house and have the ability to enjoy it for more than a year.

By eliminating your feelings in the conclusion, you will have the ability to select a house you and your partner will appreciate (and have!) Years from today.

Be Eager to Postpone the House Hunt

In the event that you and your partner are butting heads, then have a step back in the dialogue. There’ll always be new houses available, however digging on your heels along with a home-purchase debate is only going to make a split between you and your significant other. One particular realtor frequently advises couples that are having difficulty finding common ground to have a two-week break out of the dialogue then reconvene. This realtor believes that the couple’s relationship with each other is more significant than a home. Real estate agents need couples to get into the same page rather than putting them in a tough position.

A residence is not worth straining your union. Compromise is vital to finding something which will fit both your requirements. When one newlywed was searching for a house with her husband, she concentrated on three things through the hunt: personal requirements, funding, and their relationship. If couples do not prioritize these items, she states,”You may also be single again and buy a home by yourself.”

Therefore, if you and your partner can not agree on a house, have a breather. Create a pact you won’t talk places, square footage, cost, etc for at least a few weeks. Then return to the dialogue with a new perspective and prognosis.

Allow Your Real Estate Agent Be Your Mediator

A quality property representative can hear your home disputes and also help bridge the gap between you and your partner. With their intimate knowledge of this current market, an experienced broker can offer sound, unbiased information.

Most agents have plenty of experience helping couples that desire different things from a house. One particular agent even jokes that they could be a counselor if real estate does not make more money. This agent explains that she is in a position to ensure every individual feels heard, ease their anxieties, and find a solution which works for everybody.

One newlywed had expressed that her real estate agent was found to be extremely helpful throughout the house finding process. She and her husband had just gone through a process of ivf baby sex selection after disagreements on the gender of their baby. It was needless to say, put more strain on their shoulders and caused them to be more susceptible to making bad decisions. She mentioned how her agent had helped her and her husband to step back from the ledge a few times when they almost decided to make foolish decisions because it took them too long to decide on a house and a baby was on the way. The agent, she said, did not have to get involved or help them on that aspect, but he did. She was extremely thankful for her agent then.

Do not allow a stressful situation like purchasing a house cause challenges in your marriage. Depending on your take on having children, most newlyweds would start thinking of having a baby (or probably considering the process of making a selection on the gender of your baby made possible today thanks to health technology) soon after the marriage. Having a great property expert might just help you in finding a location you love, so you can focus on the next important things in life.

Lastly, while the video below might be unrelated to buying a home, the 10 tips for newlyweds could be the key for keeping your marriage intact for many years to come.