- Is it better to lease or buy commercial business premises?
- Leasing or Buying – Which is the best option?
- How to decide whether to lease or buy a business facility?
- Which is more profitable for your business – leasing or buying?
- The tough decision – Lease or Buy a Business Facility
If you are starting or expanding your existing business in the Inland Empire, you need to make a huge decision regarding whether you will lease or buy premises for operating your business. It is usually one of the most daunting decisions that business owners need to take.
Both leasing and buying have their own set of perks and drawbacks to offer the businesses. Don’t know which one of the two is the best option for you? Well, go through the pros and cons below, and they will help you choose the best-suited option.
Pros of Buying Office Space
- Locking your mortgage means that you will have to bear a fixed cost every month.
- Owning a commercial space provides you with tax deductions in terms of mortgage interest and other property-related taxes.
- You can rent out the extra space to earn extra income.
- You will own the property in the long-run.
Cons of Buying Office Space
- Ownership can be a headache as it comes with a ton of property taxes, maintenance costs, etc.
- The upfront cost is often much for small businesses to tackle.
- Your business might not be ready to cater to substantial mortgage payments every month, especially when you have limited cash flow.
Pros of Leasing Office Space
- You can lease office space in a prime and ideal location for your business.
- You don’t need any upfront cost, which helps you avoid long term loans.
- You don’t have to tackle any ownership issues so you can focus all your energy on your business.
- It frees up your working capital, which you can invest in your business.
Cons of Leasing Office Space
- There won’t be any upfront cost, but you may be subject to an increase in your annual rent until your lease expires.
- Leasing is just an expense and not a long term investment so that you won’t have any equity by the end of your lease.
Which is better?
Well, there is no straightforward answer to whether you should buy premises or lease one for your businesses. Both the financing options have their own set of perks and drawbacks to offer to the business. It would be best if you analyzed both the opportunities with regards to your business to figure out which option suits your business needs the most.