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Entrepreneurs should avoid the distractions of real estate

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For a small business owner, one of the biggest expenses after working to create a corporation is the rent for the company – which leads many to consider buying a property outright. But Inc. magazine contributor John Warrillow says that buying real estate can be an unnecessary distraction.

Warrillow says that buying a piece of commercial real estate – even at a reduced price – is a business in and of itself. While it will add physical assets to the company’s value, the property can also bring in a number of distractions that small business owners who lease or work from home don’t have to deal with.

That lost time takes away from what he says should be their sole focus – working to run and expand their existing company. Warrillow says over time, putting in the effort to improve the company itself may add more value than owning its physical location.

The current economic situation has also led landlords to give big incentives to prospective tenants in many areas. A study by Moody’s Investors Service last month found that the price of commercial property had dropped 42 percent compared with October 2007. The price of office and retail spaces also fell 32 and 28 percent, respectively.