Commercial Leasing vs. Commercial Sales

commercial-buy-leaseMoving your business to a new location is a tricky affair that requires careful planning and consideration of your business’ needs.  You need to choose your location with the utmost care and consider the costs and conditions of your change.  Included in this is the choice between buying and leasing.  Buying is more expensive, but you own the property and the right to do whatever you need to for the building.  Commercial leasing can cost less, but you have less of a choice in caring for the building.

Commercial Buying

A purchase is outright more expensive than leasing.  A down payment on a building can cost 20 percent of the total price of the facility.  You get more control over the building, though, which means you can completely renovate a rundown building to fit your needs.  The cost of owning the building can also be written off of your taxes, and you can rent it in turn to another business if necessary to increase your profits and further reduce taxes.  The flexibility to change the size and shape of the building can also benefit you as your business grows.  Bear in mind that if the property is connected to other properties, you won’t be able to change it in nearly as many ways.  If the investment is worthwhile, purchasing the building will work out well.  Commercial leasing may work better if you can’t find a suitable location for purchase.

Commercial Leasing

This method of property acquisition is quite different than buying.  The base costs of leasing are much lower than purchasing, and will remain lower unless you keep your business in one location for a long time.  However, you don’t control the structure’s fate.  Without direct access to the building’s documents, you can’t make changes to the structure, even if it desperately needs repairs.  Of course you don’t have to pay for the upkeep, either, and a reasonable landlord will listen to your needs and schedule repairs appropriately.  This is a better option if you project a stable income for your business, since slow growth means you won’t surpass the building’s size quickly, while a leaner year won’t ruin you financially.  Also, if the property is connected to other units, you will have neighbors available to help you with the more personal side of maintenance.  Bear in mind that you need to be friendly to them, though, since their complaints will register with the owner.  On the other hand, that politeness will earn more respect and possibly recommendations to friends to help your business.  Commercial leasing can prove to be a wise business choice.

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This entry was posted on Friday, March 20th, 2015 at 5:24 pm. Responses are currently closed, but you can trackback from your own site.