Renting Vs. Buying Commercial Property

There are many business owners that ask a crucial question at the end of their financial year; should they rent or lease their commercial property

. There are various benefits for both renting and buying yet some of the advantages may make a business owner lean more towards renting their commercial property or purchasing it. Not all businesses are in the same situation so you will have to weigh your options. Knowing the most about the advantages and disadvantages of renting and buying can help you make an extremely informed decision. Below you will learn the pros of renting and buying commercial properties to help as a starting point for you to make this informed decision.

The Advantages of Renting

Renting may seem advantageous for many businesses especially those who are starting out or those who just do not have the financial stability yet to make such a large investment in purchasing the commercial property. Below are the advantages of renting:

If there is not much cash that you can lay out up front, then a rental agreement will help to manage your cash flow without depleting your funds.

Tax deductions are made possible if you use your technological equipment for work purposes or run your own business. This means that your monthly payments may be 100 percent tax deductable saving you a lot of money. For further information regarding your tax deductions, you can speak with your tax adviser or your on-site accountant.

Your business model can include your monthly rental payments in addition to the cost of your technology to be factored in.

Renting allows you to move your business if the area becomes less than ideal

The Advantages of Buying Commercial Property

Now that you know the advantages of renting commercial property, you can find out the pros of buying commercial property below:

Not all businesses need to update technology on a regular basis. When the commercial property is purchased, you will own everything in the space. You can decide when necessary purchases need to be made depending on your and your businesss needs.

Although renting allows you to pay less in the short term, over a long term time scale, buying the commercial property will allow your company to pay less for the space.

The government has been currently been offering lucrative incentives for small businesses to purchase their equipment and property. If the equipment is purchased up front, then your company may be eligible for such government grants.

By knowing the advantages of renting and buying commercial properties, you may be able to make a more informed decision. Renting seems to be better for young businesses or businesses that do not have the upfront fees to make such a large investment. Small businesses and mature businesses are more prepared for purchasing commercial property.

by: Ralph Garofano

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