Should you buy or lease a commercial property?
If you are planning to make investment in real estate, and the experience behind them, starting with a new one, you may be obstructed with a decision: to buy or to rent it out. When making this decision, it is necessary to take into account the size of the projected earnings, growth rate and the regulatory requirements that apply to our business. Buying a real estate property, will help you save the cost of a certain amount of time, as well as to take advantage of a rise in real estate prices, but you're going to need more cash yet when you rent a place for business purpose.
The benefits of having a commercial property on lease
- Cash Flow: The cash flows from a purely economic point of view, the commercial space for lease is a good option. If you have a number of new companies and the income from them, only increases, then leasing is your best option. In case of a lease, your down payment is going to be limited to the security deposit and the first month's rent. In the case of a purchase, you are spending, and the value of the property, or at the very least a down payment for the loan, that is usually a pretty high level.
- Property Maintenance: In many cases, the responsibility for the maintenance of the property is of landlord. If you do not want to take care of the maintenance, and just want to focus on your core business, then commercial retail property leasing may be the best option. The maintenance costs are lower if you lease a commercial property. But if you have a property then it may be significant in costs in order to maintain the structural strength of the building, along with the day-to-day repairs.
- Reclaim Flexibility: You might wish to retain the flexibility and don't get tied up in one place for a long period of time. Commercial retail space leases also provide for a greater range of movement than that of a direct purchase. Moving to a new location, making a commercial property available for the purchase might not be a very good choice, especially if real-estate prices are rising.
- Falling Locality Prices: There are localities that are able to witness a decline in the market value of a property. If you are on a property in accordance with the requirements set out in that locality, it is recommended to lease the property rather than buy property in such location.
