Friday, March 13, 2009

To Lease or to Buy...The Best Decision for Business Owners

Dear Property Manager,

I am considering moving my business out of my home and into a commercial space. I am wondering if there is an advantage to buying the property instead of leasing. Is there a set of guidelines or a thought-process that will help me make this decision?

Any advice you can provide would be appreciated!

Mike K. Tega Cay, SC

Dear Mike:

To buy or to lease is a tough question for many business owners. And each individual situation is different--so the answer is... "it depends."

The first thing to consider is your finances. If you are able to purchase a commercial building--this could be a great option. You may also be able to lease out space that you are not using as a secondary income.

However, there are many headaches, frustrations, and extra work that can come from owning a commercial property. If you want or NEED to focus solely on your business, leasing may be the smartest way to go.

Below are the pros of leasing your business property:

1.) Flexibility. The biggest advantage is flexibility--when the lease is up, you can easily relocate to another office that better suits your needs.

2.) Less responsibility. If you are leasing, a property manager, or building owner will be responsible should maintenance need to be done--one less thing for you to worry about.

3.) Cash flow. If you aren't locked into a mortgage, you will have the option to take cash and allocate it to the projects and resources that you need to keep your business moving forward. Also, you won't need a down-payment, (typically 20-25% of the price of the down payment).

4.) Negotiable rates. The current market has plenty of properties available. You may be able to negotiate an excellent rate for your business, and lock it in for years to come.

5.) Easier tax paperwork. If your business is leasing office space, your income tax return will be simpler to file than that of a business owner.

Good luck with your decision and if you need any assistance in finding the right building--to buy OR to lease, please give Kuester a call at 704.973.9019.

Property Manager

Kuester Property Management

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