Should you lease your commercial real estate?

| Apr 16, 2021 | Estate Planning |

If you’re a business owner who is expanding, one thing you’re going to be looking into is finding your primary office space or location for your business. Deciding if it’s better to buy or lease that space is one of the first things you need to do.

There are pros and cons to each. Before you decide, you should review this list and make sure you’re familiar with how buying or leasing your piece of real estate could impact you and your business.

Buying commercial real estate

The first benefit of buying commercial real estate is that you will own the property if you pay in cash or be working towards owning it if not. You’ll build equity, which is a good way to increase your business’s value.

Property tends to be an appreciating asset, too, so you may find that your purchase is worth more in the future than it is now. Beneficially, if you ever want to rent it out, you can make a decent rental income from it.

Since this is a property for your business, you may also be able to deduct the interest and depreciation. Some business write-offs might also build up there, such as the cost of utilities or office space. 

Leasing commercial real estate

Leasing a property is a good way to get started without buying outright. It’s less expensive, usually, and it gives you the opportunity to test an area where you may later want to build or buy. There are fixed monthly costs, and you may still be able to get tax breaks from lease payments, your property taxes and other business-related purchases. 

These are a few things to think about if you are considering buying or leasing commercial real estate. Either can be an excellent choice depending on your specific goals.