There are many important factors that one must consider when it comes to either buying or renting a factory in Thailand as a foreign business owner. So, where do you begin? If you’re feeling a little overwhelmed by it all, give this article a quick read and we’ll take you through the pros and cons of buying vs renting a factory in Thailand.
Buying a factory
Here’s a look at some of the instances in which buying a factory is a great choice:
- If you buy you can have total control over the factory and thus carry out any renovations you’d like. When renting, there may be some restrictions.
- If you are focused on long-term costs, buying outright will typically be cheaper than paying long-term rental fees.
- Location is important and if you find a factory in a strategic location that is only available to purchase, it may be your only option.
- If you can’t find a factory to rent that ticks all the right boxes, again, buying outright may end up being the best choice.
- You’ve researched an ‘up-and-coming’ area and believe that you can benefit from appreciating land and property values in the future.
- There is tax saving potential to consider when purchasing a factory.
Renting a factory
Here’s a look at some of the instances in which renting a factory will be preferable:
- Your cash flow is critical in these early days of your business’s development and thus cannot afford the initial investment.
- You’d rather leave maintenance, upkeep, and security concerns to a landlord and focus solely on operating your business.
- You do not want to be bound to any one location and wish to maintain some semblance of mobility (e.g., being able to move on and upgrade in the near future).
- Your business can’t yet obtain the credit you need to support a property loan on a factory, etc.
- You haven’t found a suitable factory for sale in your preferred location and can only rent.
- You don’t have much faith in the land or property appreciating in value in the future and would rather rent for the time being while looking for better investment opportunities.
Final thoughts
As you can see, there are some significant pros and cons to both renting and buying a factory in Thailand for your manufacturing business’s needs. It’s all very circumstantial and thus in some cases, either option may end up being superior to the other.
Ultimately, you have to do what’s best for your business. Why not search DDproperty factories to buy (with units available all over the country), and see if there’s anything that suits your budget and strategic requirements. Otherwise, renting could indeed be a viable alternative for this stage in your business’s development.
