If you’re looking to launch a new business or expand branches of one that is already up and running, then making a decision on whether to choose a commercial property for lease or for sale can be a real conundrum. This specific decision-making process requires proper thinking, planning and analysing in order to ensure you make the right choice.
Once you move forward with your selected choice, there’s no 7going back. There are benefits to both sides of it and both of it; however, your option also majorly depends on the futuristic needs and expectations of your business. Here’s all you need to know about leasing vs. buying a commercial property.
Leasing And Its Advantages
To lease a commercial property means to sign an agreement that allows you to rent the space from a landlord who works under the owner of the building. The agreement requires both you and the landlord to abide by the contract rules and regulations during the period of the lease, which generally lasts for 12 months, after which you are generally required to renew the agreement in case of lease extension.
The advantages of leasing property are as follows
Flexibility – When leasing commercial property, you have the freedom and flexibility to give up the space as you please when your lease expires, without the worries of having to find a new occupant. It keeps the door open to any future possibilities, be it to leave or renew and continue the stay.
Move-in Costs – Moving into a leased commercial space is known to be generally less expensive. The most that leasing is going to require off of your wallet is a security deposit and the initial payment rent.
Repair and Maintenance – The landlord is often responsible for general maintenance and building repairs. This expense is a fixed amount in your gross rent and doesn’t require extra cost out of your pocket.
Some of the other benefits are fixed monthly costs and access to more liquidity.
Buying and its advantages
Investing in a commercial property is known to be considered a wise decision. This is because the value of the commercial real estate is long term. Depending on your situation in present terms and probabilities for the future, owning commercial property can make for a great option. Here are some of the advantages if you planning to buy commercial property.
Mortgage payments – When buying a commercial property, your mortgage payments remain to be a fixed expense leaving no space for possible increments.
Tax – The tax benefits present in owning a property helps you save an immense amount of cash but deducting the depreciation on your property is a tax break.
You’re in Control – You hold ownership over the property and therefore you’re in charge and in control over it allowing you to renovate, make adjustments as you please without having to deal and negotiate with landlords.
Some of the other benefits include rental incomes and space to build equity.