Is Leasing or Buying Modular Buildings A Better Investment?

As a business owner, you’re presented with many decisions in a day. One of those is if you should use modular buildings to help support your business. You’ve looked over several factors, including your budget, timeline, and business goals, and concluded that this is the right decision for you. 

And now one of the most important questions is which is better—leasing or buying modular buildings? We’ll discuss some of the reasons you’d consider using a modular building and the pros and cons of buying and leasing. 

When you have a young start-up, you should be fiscally cautious until your business grows and starts making a profit. By leasing a modular building, you aren’t taking as large of a financial risk. You’re still committed for the term of your lease but you don’t have the large upfront costs associated when you buy a modular building.  

Leasing also gives you flexibility. If you have a tight budget and only need the building for a few months, then leasing would make more sense, versus going through the hassle of buying. Or if you have a short timeline and need a building immediately, leasing would work because you could get an agreement signed that day and schedule installation.

Also if you lease, you might be able to negotiate better terms, like the rent not going up or including some possible maintenance work or repairs in your monthly rate. And, you won’t encounter any hidden costs or taxes that may come up when you own a building. 

Leasing is also a good option if your business is growing and you’re not sure how fast you might outgrow the property. You might not want to purchase if you aren’t sure of your long-term plans. But it’s fairly easy to lease a modular building, and it can grow with you as your business grows.

While leasing a modular building doesn’t require as many up-front costs, you will have the long-term costs of your lease, which can end up being higher than the price of a modular building, depending on your term.

In addition to the lease payments every month, there’s the possibility of your lease amount increasing or the terms changing mid-lease. Always read through your lease and the terms before you sign it. 

These agreements come with terms and conditions that may impact your ability to make certain changes or upgrades to a modular building. There are some customizations you can make but since it isn’t your building you don’t have free rein to make changes—you’re limited in tailoring the space to your needs.

While some lease agreements may include maintenance services, others may require you to manage and fund maintenance activities. This responsibility can add a layer of operational maintenance and cost.

Unlike owned properties, leased modular buildings don’t create any equity or give you any potential resale value. This can be a disadvantage for businesses looking to invest in assets that can increase in value over time.

One of the advantages is the financial value in the long term. While there are more upfront costs, in the end, this is a building that you own. You don’t need to pay for it every month or buy another building unless you need one for more space. There aren’t any fears of losing your space at an inconvenient time and having to relocate your business.

You’re also not beholden to a management company to make any improvements or fixes and can make these decisions for yourself. If you see something that you want to change, then you can go ahead and do it without asking for permission. 

When you own your modular building, you can customize it to your specific needs. If you need more cabinets than what’s included in the standard floor plan, you can add them, or if you want specific flooring, that change can be made. 

Owning a modular building can help you grow your business since it lets you plan for future growth. Since you own the building, you don’t need to worry about where you’re going to find space if you want to expand. You already have it and in the meantime, it can be used for other purposes like storage. 

Another benefit of buying a modular building is that if circumstances change, then you can always sell the building. This would allow you to try and make some money back on your investment. Or you can use the building as collateral to try to raise some capital for your business. 

As we mentioned earlier, one of the biggest drawbacks to buying a modular building is the higher upfront costs. You can finance your building but then you’re paying interest on your loan. Or you could pay for the building upfront but then you’re spending that money all at once. It’s a serious investment that you need to consider.

Since you would be the owner of the building, that makes you responsible for any repairs the building needs. If you keep up with routine maintenance and use quality materials when you do repairs, this could be negligible. 

Modular buildings are like cars. If you keep up with the maintenance and do the repairs correctly, then they will stay in good condition and last. But if you ignore small problems and repairs, it can lead to more expensive repairs in the future. 

Owning a building can also restrict how much money you have to put into your business. While you can plan and budget for items like repairs, new equipment, or expansions, surprises can happen. You might get into a position where you invested money into the building that you could’ve used on a different area of your business. 

In the end, both can be beneficial to your business. It depends on your business and what your goals are. Renting a modular building gives you some freedom and flexibility, which is beneficial especially when you’re starting your business. 

If you’ve established your business and have your goals defined, then the stability of buying a modular building might be the way to go. You also have more freedom to customize your modular building for your business. 

It’s best to have a solid business plan in place with a realistic budget in mind before you start your search for a modular building. 

At BOXX, we take great pride in our modular buildings. We don’t look at them as just plain buildings. We think about the different problems a modular building can solve and incorporate that into not only our buildings but our whole building process. 

Being environmentally friendly is becoming increasingly important to businesses. We use green practices and materials in our builds. This allows us to create up to 40% less construction waste. 

We also build our modular buildings in a controlled environment so we aren’t dependent on the weather and our building times are shorter than traditional construction. There is less of a chance that materials will get damaged by severe conditions and be discarded. Once all the parts are built, we assemble everything at your building site so long-term weather delays aren’t an issue. 

One-size-fits-all modular buildings don’t work for everyone. We know that your business is unique and has its own needs. You can choose from several floor plans and configurations. You can also add additional storage and select materials for your design, like flooring. 

As we mentioned earlier, depending on your business leasing a modular building might be the best option. At BOXX we offer both modular building leases and purchases. You can get exactly what your business needs and what makes the most financial sense for you. 

When you invest in a BOXX modular building, whether you want to rent or purchase, you get a product that can work for every stage of your business and can help it succeed.