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To buy or rent?

By Lumen P. Balboa |

To rent or to own? That is the question. Off the bat, renting the best location puts one over owning the second best site because the right location often spells the difference between boom and bust. Renting also has its benefits, especially for starting entrepreneurs. Buying a business location from the start also entails heavy capital outlay and high costs of construction and repair. In contrast, renting has the benefit of having a landlord take care of all repairs.
 

Take the case of Suzanne Escudero. At the start of the millennium, she was wringing her hands over having to decide where to put up her Figaro franchise outlet. Armed with a shopping list given by real estate brokers, she combed old and new buildings in the cities of Makati, Pasig, and Quezon in search of the perfect location for her coffee shop. She eventually settled on new building on Sgt. Esguerra St.,more popularly known as Bohol Avenue.

 

Escudero, whose lease contract has been in effect for more than five years, explains her choice: “It’s near my house so I can easily monitor the staff and the business,” she says. “Best of all, it’s very near the top two television networks in the Philippines. Media people work long and unpredictable hours and they are always in search of a good cup of coffee.”

 

But Escudero wanted to buy her own place. “I felt it would give me a sense of security. But starting my own business made a huge dent in my savings that I did not really have any choice but to rent,” she explains.

 

She even thought of taking out a bank loan, but eventually she and husband decided against it. “We felt we already had too much exposure on the store. We decided to wait until we had enough money to buy our own property.”

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your_place_or_mine_1.jpgCes Yuzon, another start-up entrepreneur, agrees with Escudero’s decision. “It’s more practical for starting entrepreneurs to rent, rather than own, their place of business. Unless of course they are lucky enough to own one in the right place.” This director of a newly formed company that imports and distributes a food supplement says before you buy real property, the business should be up and running, and earning.

 

Unlike Escudero, who operated a service-oriented establishment, Yuzon’s choice of business site did not require an area with high foot traffic because it would only be used purely as an office and storage facility. But like Escudero, the Yuzons searched for a suitable office space in various parts of the metropolis. They finally decided to open an office in San Juan “because we realized that it was the most business-friendly place in Metro Manila.”

 


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