Before establishing a business, every business owner needs to confront one main problem. Should they purchase their own commercial property or opt for a lease? Both options come with their own advantages and disadvantages. Without a doubt, owning a commercial property is inherently more risky because costs are higher upfront. However, many business owners quickly realize how beneficial this decision is in the long run.
Owning versus Leasing; Cost versus Flexibility
Commercial properties can cost hundreds of thousands of dollars, depending upon the area in question. Plus, the size and nature of the property will affect its selling price. A business owner with enough money should always consider this option. Actually owning the building allows for more flexibility and customization. Therefore, the business owner can tailor the property to their company’s goals and purposes.
On the other hand, properties tied to a lease don’t come with such flexibility. For instance, a tenant can’t remodel the building without prior permission. They can’t use the building for any purpose not included in the lease. Leased commercial properties come with more restrictions than business owners realize. With that in mind, not all businesses function well under such limitations.
Short- versus Long-Term Costs
Leasing a commercial property also costs more money than purchasing one. For businesses with lower cash flow, a lease always makes sense. A company that can afford its own properties should make a purchase instead. A lease is inherently inflated in cost, so tenants spend more money over time in comparison to an outright purchase. These days, most businesses managers know this fact but choose leasing nonetheless.
For leased properties, the property owner is usually required to handle maintenance issues. The opposite is true for properties owned by the business itself. A company that owns its commercial property can lower its operating costs greatly over the course of a few years. By lowering costs, a business can focus upon investing its surplus funds elsewhere.
Purchasing a Commercial Property Makes The Most Sense
In the end, a business owner should always choose to own their own commercial buildings when possible. Leasing is a convenient solution for cash-strapped companies or those that move around regularly. Any company that falls outside these categories should opt for a property purchase instead. Otherwise, their costs will steadily rise over the years, and the benefit of leasing will eventually be lost.
Purchasing commercial office space is easy when you work with the right real estate agent. Check out our listings and contact us about buying your next work environment. Contact us and we will get started immediately.