Advantages of Purchasing Commercial Real Estate Over Leasing

If your business requires a physical location, you’ll need to choose to lease or purchase commercial real estate. There are many pros and cons to buying and leasing, but purchasing property has a few important advantages you should consider. Learn why purchasing is an excellent strategy for many business owners.

Build Equity

Purchasing property allows you to build equity. Your monthly payments aren’t just a fee associated with operating out of a commercial location, but part of the fee is applied directly to the principle of your mortgage. This means that you’ll eventually own your property outright and enjoy far less in monthly expenses.

Appreciating Assets

As you own property and build equity, you can expect it to appreciate over time. Unlike vehicles, equipment and major expenses, real estate continues to increase in value, making it an excellent investment opportunity. Whether you choose to refinance or sell your property, or simply enjoy lower monthly payments once you own it outright, you can expect to save money when you purchase property as a long-term investment.

Tax Advantages

All your interest expenses and other related expenses can be deducted from your taxes when you purchase commercial property. These tax advantages allow you to save more money compared to a lease. Leasing property has its own tax advantages, so carefully compare both options to determine the best course of action for tax purposes.

Rental Opportunities

A lease typically comes with strict operational requirements. However, owning your own property allows you to rent out a portion of your commercial building, sell your building or rent out your entire building if you operate a seasonal business. This freedom allows you to leverage your assets and improve your overall financial gain.

Freedom of Property Ownership

Renovate, sell or rent your property without worrying about approval from a property owner. As owner of your own property, you’re in control of how you use your real estate. If you’ve secured a conventional mortgage for your commercial property, you can enjoy a fixed interest rate and set monthly payments that won’t change. A property owner can alter your lease payment as you continue to renew your contract, which can result in higher payments and financial difficulty for your business.

Enjoy these advantages today by choosing a financing option to purchase your commercial real estate. Build your credit score and compare interest rates and other terms as you shop for the best way to purchase your own property.

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