Is It Better to Rent or Buy a Space for Daycare?


Quick Answer

The decision on whether to buy or rent a space for a daycare business depends on several factors, including available cash on hand, the business model and the starting size of the daycare. Business owners should also consider plans for expansion and if the daycare is to serve any children with special needs.

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Full Answer

Money is one of the most important considerations for a business owner to take into account when deciding on the most suitable location for a daycare business. The business owner should first look at her available funds to determine if buying a space is even feasible, as insufficient resources may require taking out a loan to finance the purchase. The business model, and similarly the cash flow of the business, are also important because they determine how quickly the business owner may recoup the expenditure. If the daycare does not bring in a sufficient amount of revenue beyond covering operating costs, buying a property might put too much of a strain on the business.

In addition to financial implications, the owner needs to think about what potential benefits purchasing her own space may provide. For example, if the business needs to expand to accommodate a larger number of children, then buying a larger property allows for more seamless growth. It also allows the owner to make special modifications to help care for children with disabilities, such as building access ramps.

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