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Commercial Property Lease or Buy

The decision as to commercial property lease or buy can be a tough one to make. Owning your own commercial property means that this is an asset and it is also a bit of prestige associated with this. There are however many advantages associated with just leasing. We will now look at the advantages and disadvantages to help you decide the answer of commercial property lease or buy dilemma.

The Advantages and Disadvantages of Buying Commercial Property

The main advantage with buying your commercial property is that it now belongs to your company and as such will be considered an asset. If you are approaching investors then owning your property might give them some reassurance as you could use this as part collateral. It also creates a good impression when a company owns their own business property. It makes them look well established prosperous. It also means that once the building is paid for there is no need to make monthly payments on a lease; this means that owning a building can work out a lot cheaper than leasing it.

The disadvantage of buying commercial property is that it requires a huge lump of investment that might be better used elsewhere. These days companies need as much available capital as possible; especially in the early days. Using the money spent on buying property might be much better spent on helping the business grow or on a promotional campaign. Once capital is tied up in property it is not so easy to make liquid quickly. Another drawback with this type of purchase is that things change and you may need to move your business to a different location; this will be a lot harder if you own the property. So when it comes to commercial property lease or buy there is a lot to consider.

The Advantages and Disadvantages of Leasing

As mentioned above the main advantage with leasing is that it does not require a huge investment. It also means that you are not tied to the office if it would prove more advantageous to move to a different location. The main disadvantage with leasing is that you will likely end up paying a lot more money over the long term and you still won’t own anything. A leased property is not going to be considered an asset either.

Commercial Property Lease or Buy; how to make this decision

Many new businesses choose to lease because this requires far less of a capital investment than would be required to buy. A young business needs as much finance at their disposal is possible and getting into debt so that they can own a property will often be a bad move. When a company is well established and there is plenty of money floating about this may then be the time to consider such an investment. This will likely mean paying a significantly more money over the long-term, but if your company does not have enough money to expand there might not be any long-term. So these things will need to be considered in regards to commercial property lease or buy.

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