Should I Buy or Lease?
Should I Buy or Lease? The better question is, do you want to be in the “business of owning real estate”?
- Is your business in a mature state and do you know how much square footage your business will need in the next 5-10 years? If the answer is no, then you should lease until you know. Leasing gives you more flexibility grow into space or downsize if necessary. If you own it, that mortgage payment doesn't change.
- If your business fails do you have the financial capacity to carry the expenses of the property while you try to sell it? If you have no alternative means of income then the answer is lease until you have a cash cushion to do so. Leasing lowers your financial liability in most cases and give you more flexibility to shrink or grow. If you own your real estate, and your business collapses, then real estate ownership can become an additional burden.
- Do you have the time to manage the property? Upkeep on buildings can be very time consuming, taking your attention away from your return on investment in your business. If you don’t have the time, then leasing is the right answer because the responsibilities of the “business of owning real estate” are taken care of by the owner for you.