Commercial space users are often posed with the question of whether to lease or purchase their facilities. Purchasing a property can benefit businesses over the long-term. By contrast, leasing offers flexibility and requires less capital outlay. Before you decide to purchase or lease, consider the below pros and cons:
Purchasing: The Benefits
- Build long-term equity: Building owners accumulate equity with each mortgage payment.
- Control over the process: You’ll have direct control over the day-to-day and long-term strategic positioning of your property.
- Tax benefits: Property owners can take advantage of numerous tax write offs including interest and building maintenance.
- Property value appreciation: If the market trends upward, the value of your investment can increase.
- Employ capital reserves: If your business has cash sitting on the sideline, that money could be put to use and towards a down payment.
Leasing: The Benefits
- Lower capital outlay: Leasing will minimize your investment, allowing you to allocate resources to business development, hiring, and equipment.
- Maintenance and administration is covered: Building maintenance and vendors are chosen by your landlord and are often their responsibility.
- Flexible lease terms: Tenants can pursue flexible lease terms ranging from 1 year to long-term.
- The opportunity to expand or contract: Should you need to expand or contract, many landlords will help accommodate your needs.
When deciding whether to lease or purchase, we collaborate with our clients to evaluate their business needs and financial position to help them make a thoughtful and strategic decision. Space users with a positive long-term outlook can benefit from purchasing their property. Alternatively, some businesses don’t want to engage in real estate ownership and would rather focus on their core business objectives.
Vidal/Wettenstein is a commercial real estate services firm headquartered in Fairfield County, Connecticut. Founded in 1968, Vidal/Wettenstein has been active in the Fairfield County and New Haven County markets for over 46+ years. Recognized as the standard of excellence by clients and industry professionals alike, Vidal/Wettenstein strives to consistently outperform expectations. Please visit www.vidalwettenstein.com for additional information.
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