When starting a business decisions makers need to determine whether they should purchase their own commercial property or lease it. Both options have pros and cons. Owning commercial property can be more risky since it requires more upfront costs, however in the long run there are advantages to owning.
Owning Commercial Property versus Leasing; Cost versus Flexibility
Depending on the market & area you are in and the size commercial properties can cost hundreds of thousands of dollars. If you are an established business owner with reserve money then you should always consider owning commercial property. Owning a building allows you more control and flexibility to customize it to your specific needs.
When leasing commercial property if you want to remodel you have to get the landlords permission first. You are not allowed to use the space for anything other than what is in the lease. There are many more restrictions with leasing and not all business owners can function this way.
Short Versus Long Term Costs
If you are low on cash flow then leasing makes more sense. If your company can afford it and does not plan on growing later on then purchasing a commercial property makes more sense. In the long run it will cost you more money to lease than to purchase and you never get that money back. With a purchase you are able to get tax savings with depreciation and interest and tax right offs.
Property owners are typically responsible for all maintenance costs and issues when they have tenants. If you own your own property then you would have more control of the maintenance costs.
Purchasing a Commercial Property Makes the Most Sense
In the end, when possible business owners should always consider purchasing commercial property first. Renting commercial property is convenient for those companies that are cash-strapped, move regularly, or plan on expanding and growing in the future. If your company is stable, profitable, and you don't plan on adding a lot of headcount in the future then you should purchase instead.
Purchasing commercial office space not hard when you have the right commercial real estate agent. Check out our commercial listings and contact us about buying your next commercial property. Just call 512-861-0525