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the original kStyle blog.

Wednesday, December 20, 2006

I'll just say this once

Renting space is not the way to go when running a business.

Thank you.

3 Comments:

Blogger Larry Jones said...

Sounds like you're not having fun. But renting is good in that it gets you a place to do business at a fairly low initial cash outlay, and you can start earning, sometimes years before you would have been able to buy a commercial property. Also, for tax purposes, the rent becomes a deductible business expense. By renting, you give the world the benefit of your talent immediately, instead of after a long period of saving for a down payment.

Or maybe not. I don't really know.

3:49 PM  
Blogger Emma Goldman said...

No, Larry's right, at least up to a point. In your case, you'd have to be able to swing the rent for awhile before the business became profitable--and probably for twice as long as you thought--but you CAN write it off as a business expense. It's easier to do that than to try to write off part of your apartment, say; the IRS is much more likely to audit the latter. Can you share the expense with someone somehow? could someone use it as office space during the day, for example? you'd have to show the rental income, but it could alleviate the burden.

For some businesses--like restaurants and some other food-related businesses--it's a dicier proposition. If you make a success of the business, the landlord can jack you on the rent such that you essentially have to close (I know of cases like this). If location really makes a difference, then owning is probably a better choice.

7:55 PM  
Blogger kStyle said...

I wasn't talking about me, actually. Well, I was talking about Eventual Me. Renting is perfect for a single-person practice, but for my future tea house, we shall Buy the Building.

I learned that the closing shiatsu school had an obscene monthly rent--for that price, they could have bought and used a house (or two!) in a multi-purpose neighborhood and earned equity, too. And the woman from whom I sublet is having nightmares with the landlord, from which, thankfully, I'm insulated.

8:01 PM  

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