07 April 2022
There are a number of important factors to consider when you are trying to decide whether buying or renting a factory is the best move for your business. In this article we’re going to explore these factors, ask some important questions, and try to determine which would be the best option for you. Read on to find out more.
One of the biggest advantages of renting a factory is the fact that your original outlay of cash intended to purchase an asset will typically be less for leasing than it would be for purchasing outright. That said, one advantage of buying is that you will ultimately end up paying less in the long term as you would if you lease. Additionally, if you do purchase you will get the added benefit of the potential appreciation in value.
One way of reconciling these factors is by doing an analysis of your net cash flows that would result from both purchasing and leasing a factory. In order to do so, you need to know certain facts such as:
In this light it’s important that you not only think about the short-term implications of your decision, but also the long-term.
So, what other important factors should you consider when making the decision to buy or rent a factory? The following factors are geared toward purchasing, rather than renting a factory:
Similarly, let’s look at the following important factors from the perspective of renting a factory, rather than purchasing it outright:
As you can see there are many different factors to consider when making the decision to rent or buy a factory outright. So, take your time and do plenty of research, consider the short and long-term impacts of buying and renting, weight up the pros and cons of each and make an informed decision as to which is going to be the best decision for your business at this time.
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