Still leasing? Consider the benefits and discover if you should buy a commercial property instead!
Buy vs Lease – A common question among small business owners is whether to buy or lease commercial property. While leasing may be the ideal option for short-term needs, you may be missing out on the many advantages of buying a commercial property for your business. Below are some of the reasons why many business owners choose to buy rather than lease.
It’s never a waste of time to meet with an agent to discuss your options. You may be missing out on savings and other benefits by not considering property ownership over leasing.
Buy vs Lease Advantages
Tax Savings
- Write off all of your mortgage interest.
- Depreciate the commercial building and equipment.
- Property income is ordinary vs. earned income.
Increase Personal Income
- Reduce your earned income by the amount of your commercial building income. This will lower your personal income tax burden.
- Hire family members to (legitimately) manage the property.
Build Equity and Wealth
- Increase your equity ownership as a result of principal reduction (paid for by your company’s rental payments)
- Depending on your space needs you may be able to lease part of your building to other tenants who will help pay for your commercial building.
Appreciation
- Potential increase in the value of the property over time due to inflation or property improvements.
- Changes in supply and demand in the real estate market may increase the value of the property.
Control Lease Expense
- With a long-term mortgage and control over commercial building expenses, as the owner you can better control your business’s lease expense vs. traditional leasing.
Add Value for Future Sale
- When you sell the property, you owe less on the loan, so you receive more cash at closing.
- If you sell your business in the future, you have an additional asset to increase the overall value of the business.
Historically Low Interest Rates
- Mortgage interest rates are still historically low and consequently the decision to purchase a commercial building should be now.
- Build equity more quickly than in the past.
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Why choose to work with Republic Realty Advisors?
Save Time, Save Money, and Improve Your Bottom Line. Republic Realty Advisors provides Investment Real Estate Knowledge and Experience, Market Expertise, Comparable Building Analysis, and Local Market Conditions expertise.
Address: 9330 LBJ Freeway, Suite 240
Dallas TX 75243
Phone: (214) 342-2355
Email: info@RepublicRA.com