Is It Better To Buy Or Lease Your Commercial Property

There are tons of questions raised when you are searching for your new business. Should you buy or lease a commercial property? Listed below are pros and cons of both buying and leasing, so that you will be able to choose the better route for your business.

 

PROS OF BUYING COMMERCIAL PROPERTY

 

Many business owners end up buying commercial property to simply avoid the cost of rising rent. This action alone maintains a competitive edge over “enemies” who would be disrupted by a move. Other business owners do this as an investment, because your business can grow and even provide additional sources of income. The biggest asset of buying your commercial business however may be the fact that it will be much easier for prospects to get financing if they are buying both business and real estate.

 

There are also many common sense factors that play into pros of buying your commercial property, and one of the biggest factors is that if you own your business property, you will never have to ask a landlord to make changes, you are the owner and you can do as you please. Also, in the long term range of things, buying could actually be cheaper than leasing because after a long time, the cost of leasing can actually add up to be MORE than what it would have been to buy the property.

 

CONS OF BUYING COMMERCIAL PROPERTY

 

Just as there are pros to buying commercial property, there are also cons. One of the biggest risk factors is the fact that buying your business could limit your ability to take advantage of new opportunities. If you feel like you could lock in a lease with your building in question for reasonably less than buying, and you know that the building will fulfill all your needs for the next however many years on your lease, then renting might be the better option.

 

PROS OF LEASING OR RENTING COMMERCIAL PROPERTY

 

Leasing could possibly be the better option for your business, especially if your cash flow is very vital to you. Usually, at least in the early years, a lease would be significantly cheaper to rent out than it would be to purchase. Another great thing about leasing is the fact that you don’t have any maintenance duties. The grass gets cut by someone else, all repairs are on someone else to fix and if it snows so bad you can’t get in the door, someone else is there to shovel the driveway and walk ways.

 

Another reason leasing may be the better option is the sheer fact that you want to sustain your mobility, not being kept in one place. Leasing gives you the option to have your business up and running, but still have the chance to look around at other possible properties.

 

CONS OF LEASING OR RENTING COMMERCIAL PROPERTY

 

The biggest con of leasing or renting would be that you have to ask your landlord for any answer to any decisions you want to have done to the property. You don’t actually OWN your property, so leasing makes it seem like you have someone to answer to, even though you are the boss. Also, leasing is sometimes unstable. You never know if the location of your business will collapse, or if someone else comes to buy out your property.

 

In the end, both leasing and buying commercial property are wonderful ideas, and neither is better than the other. Your choice should be based on your goals and wants and needs for the company, as well as your budget.

If you are interested in flipping residential properties check out our article on does flipping still make sense.