Owning versus Leasing
It is essential for a business that they find the right location to set up their business and to decide whether to buy or lease a location. There are advantages and disadvantages to both. You will need an experienced commercial REALTOR®, an accountant and a lawyer working together to help you make the right decision.
There are several financial as well as non-financial factors that need to consider.
Non-financial factors may include whether the business owner insists upon owning. They want absolute control of the property or do not want the hassle of having to renew leases, the availability of properties in the desired location.
Financial factors for opting for leasing include less initial capital required. The monies saved by leasing allow you the flexibility to use the monies saved elsewhere, deductibility of lease payments, and a lease may be less restrictive than a business loan. An increase in the value of the property allowing for access to monies by refinancing the property, the deduction of cost recovery and control of operating costs are considerations that favour buying the building.
A commercial realtor® can provide you with information on current lease rates, what are fair operating costs, historical data on prices and values all necessary for you to make an informed decision.
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