Furnished Or Unfurnished Office Space: What Should You Rent?
In the backdrop of growing competition, one of the biggest dilemmas that modern-day entrepreneurs face is whether to opt for an unfurnished office space or a furnished commercial set-up. However, experts believe that the size of the business should be a critical deciding factor for leasing out an office space.
While unfurnished offices assure lower rentals, the cost of setting up the space might be financially draining. Similarly, though furnished offices are appealing and immediately available for use, their average leasing values may be too high to burn holes in a pocket. Since choosing between a furnished and unfurnished office space remains a potential hassle for entrepreneurs, experts assert that the size of the business should be the determining factor.
According to Sidhant Lamba, Founder, Fabrento, “In the commercial world, everything boils down to the business size and the investment ability of the entrepreneur. While both unfurnished and furnished spaces have their pros and cons, it is essential that the owner evaluates the expenses and compares them against the budget to arrive at a feasible solution. For instance, it would be cost-effective for a start-up to lease a small office and rent minimalist furniture or opt for coworking space. On the contrary, a bigger firm may either opt for a fully-furnished space or can lease an unfurnished space and get it customised as per the needs, requirements and goals of the business.”
Here are a few Pros and Cons of Furnished and Unfurnished for better understanding:
Advantages Of Furnished Offices
Fully set- up
A fully equipped office space allows you to immediately take possession and begin work without impacting the business operations. Besides, it lends a more professional and dynamic setting, which renders a significant boost to your company’s productivity and image.
It is important to consider every little aspect while shifting the business to a new place. Right from the location to the cost involved in the acquisition of furniture, everything should be well-calculated. Even the simplest of tasks such as choosing the right style of furnishings, ordering them and receiving the delivery can take several weeks or even months. However, renting a furnished office space eliminates the waiting around and time wastage. This is more effective for bigger firms where the workforce is vast, and even a day’s delay in operations can significantly impact their turnover.
Disadvantages Of Furnished Spaces
High leasing values
One of the biggest downsides of furnished spaces is high leasing values. The average rentals of furnished office spaces are 40-50 percent higher than the unfurnished spaces. Since these offices are equipped to cater to the needs of different tenants and incorporate all the amenities, their leasing values are generally higher. “The average leasing prices can go as high as 60 percent more depending upon the location of the office. Centrally located office spaces are pegged higher than the commercial developments in the outskirts owing to the higher land rates in the city-centres." shared Zakir Hussain, Property Agent, Topend Realty.
In the case of any accidental damage or any other loss to the property or the interiors, the tenant would be held directly responsible, and the landlord has the complete right to recover the cost from the security deposit provided at the commencement of the deal.
Advantages Of Unfurnished Offices
Unfurnished spaces offer the convenience of customisation. The tenant can design the interiors in accordance with the business goals and render a more personalised touch to the area. It also allows the tenant to add and remove the furniture and other amenities as per the business needs. Moreover, there is a wide range of furniture and other office decor items available on rent; thus, you need not worry about investing a fortune in buying furniture.
As stated above, the average cost of unfurnished spaces is approximately half of furnished spaces, which makes it a convenient option for businesses yet to attain the break-even point. Coworking arrangements can also be a viable option for start-ups. However, the average leasing cost of an unfurnished space is 10-15 percent lower than the coworking spaces. Furthermore, coworking spaces pose restrictions on the usage of amenities such as conference halls, tea-zone and others. Shorter lock-in periods, typically three months, is another hassle with coworking spaces which make them inappropriate for firms which intend to operate at a specific location for a longer duration.
Apart from the maintenance cost, unfurnished office spaces do not impose any other obligation on the lessee. Unlike the furnished spaces, here either the furniture is hired or purchased; therefore, no additional cost is deducted in case of furniture damage. Also, in the case of purchased furniture, it is an asset, and you can get it transported to the new place of work when vacating the office.
Disadvantages of unfurnished offices
Unfurnished offices are leased out as bare shells. Right from the electric wiring to set up the workstations, the entire work has to be managed by you, which not only involves time but might impact your business as well. In such a situation, it is advisable to lease out a new office and get all the upgrades done before leaving the previous place of work. Though, it can be slightly costlier at the start since you have to pay rent for both the offices, the cost will be one-time and can be recovered in due course.
While the advantages of unfurnished offices outdo furnished spaces, the decision of renting the office space should ideally rest on the business needs and prospects. Evaluate the expenses and anticipated returns, and lease a space that can be sustained for the long term. Renting a high-end space for a few months to lure customers and then moving to a smaller office can have a negative influence on your business.