Are you looking for a new facility for your enterprise? If so, one of your most important decisions will be whether or not to buy or lease the facility. Depending on the current state of your business, either may be the best option for you.
Signs Leasing Might Be Your Best Option
Are you leaning towards a lease or are just a little unsure? Leasing carries many benefits, depending on your situation. Here are a few signs that a lease might be the best decision for your new facility:
- You’re concerned about cash flow. Having enough liquid cash is important for a healthy business. With a lease, you don’t have to worry about large down payments and you may be able to get a better deal with your monthly costs.
- Your credit rating isn’t spectacular. If your company is new or you were hit hard in the 2008 crash, you might not have a credit rating sufficient for a mortgage. If so, a lease should be easier to secure.
- You don’t want to be responsible for maintenance. With leasing, your landlord is responsible for most repairs including the costs.
- You can’t find the right property. Real estate is an investment, especially for businesses. If you haven’t found the right spot, pick a temporary one.
- The property’s value is declining. If you found the right place but its in a neighborhood with declining property values, leasing will help you avoid long re-sales and give you an easy out if your consumers move to new areas.
Signs Purchasing Might Be Your Best Option
You’ve probably heard a host of benefits for buying your own property, but is it the best option for you? These are some key signs that you are ready to buy a facility for your business:
- You’re concerned with long-term costs. Depending on your financial plan, you may be more focused on cutting costs in the long run. Over time, buying a property is less expensive than leasing since landlords build their profit into your rent price. With a property purchase, you can avoid paying those premiums.
- You found the perfect location. Perhaps for your enterprise, it is incredibly important to be located in the right spot or maybe you just found a great office with an even better view. Once you find the right location, it might make sense to really put down your roots with a full purchase.
- You want full design control. Once you purchase a property, you can make whatever changes you want to the place even if that means starting from scratch. If you’re thinking about really customizing your space, you might want to buy your new facility so you get the design freedom you’re looking for.
- You can’t find the right lease. While leasing offers a great range of options, you may find those spaces limited in terms of size, location or a number of other important factors. When one option isn’t working, it makes sense to try the other. If you can’t find the right lease, you might just need the right deed.
- You found a property with appreciating land values. Location is everything when it comes to a real estate investment. If you buy at the right time and in the right area, your property will rise in value, which can make a resale very profitable or give you a means of funding important renovations.
- You want to take advantage of tax savings. Through depreciating the property gradually, you may incur some tax savings. Moreover, your property financing may be eligible for interest deductions.
After reading over this guide, you should have a better idea of what is the right decision for you. If you’re still having trouble, consult with your financial consultant and talk to your realtor.
The content on our website is only meant to provide general information and is not legal advice. We make our best efforts to make sure the information is accurate, but we cannot guarantee it. Do not rely on the content as legal advice. For assistance with legal problems or for a legal inquiry please contact you attorney.