Buying vs. Leasing A Commercial Real Estate Property
2 min.
When deciding on securing a space for your business, one of the most crucial choices you'll face is whether to buy or lease a commercial real estate property. Below, we've outlined the advantages and disadvantages of both options.
BUYING
Buying commercial real estate is a huge step for any business. It allows the property owner to fully customize the space to their needs and avoid limitations imposed by a landlord if the space is leased.
If location is an important factor for your business, it can be challenging to find a prime location. Once found, however, it can help with increased sales and foot traffic, ease transportation, reduce costs by being near key suppliers, and attract and retain employees. Additionally, commercial real estate is a great investment, whether the space is leased to other businesses or used for your own business, as you build equity.
It’s important to do your due diligence when going through the process of purchasing a commercial property. Hiring a lawyer specializing in commercial real estate can help in reviewing the contract to avoid any surprises down the line.
LEASING
If you’re a new or small business, it’s often better to start by leasing a commercial space rather than buying one. Leasing a commercial property can leave room for more flexibility as businesses can change quickly such as if your business is rapidly growing or downsizing. It’s important to review the lease agreement for any obstacles that could arise, it’s best to go over the clauses with a lawyer.
Leasing the property avoids the responsibility of ownership costs and obligations, such as mortgage payments, property taxes, maintenance and repairs, and more.
Deciding whether to buy or lease a commercial real estate property is a significant decision that depends on your business’s needs, financial situation, and long-term goals. Both have advantages and disadvantages, but ultimately, ensuring the path you choose supports your business’s operational needs and long-term goals is the key to making the right decision.
Reference
BDC. (2024, May 27). Is it better to buy or lease a commercial space?. BDC. https://www.bdc.ca/en/articles-tools/money-finance/buy-lease-commercial-real-estate/buy-or-lease-my-commercial-space
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Our commercial real estate industry and segment expertise coupled with Royal LePage’s national platform and integrated systems provides best-in-class real estate strategies and a competitive advantage that can’t be beat.
We help businesses identify opportunities and maximize their return on investment with actionable goals, centralized support services and a strong commitment to customer success. Our national partnerships help us establish, guide and execute successful business investments.
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