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Benefits and Disadvantages of Buying Versus Leasing Commercial Real Estate

Posted on: March 8, 2016

If you’re in the process of deciding whether or not you want to buy or lease a commercial property, you will have several considerations to take into account. Buying a commercial property has several potential advantages compared to leasing but there are more risks as well and some disadvantages that will vary depending on your circumstance.

Meeting with a Fort Lauderdale commercial real estate attorney to get an expert opinion on your potential commercial real estate deal is a smart decision, even if you are experienced with these transactions. A few of the benefits and disadvantages of commercial real estate ownership are outlined below.

Owning commercial real estate has several advantages

When you own commercial real estate you are not exposed to market rent increases, which can be a significant advantage in the areas of Florida that have had rising commercial rents. You will also be able to receive rental income in the future if you decide to rent the property out at any point. There are also several tax advantages to owning a commercial property along with the benefit of capital gains if the property appreciates.

There are some disadvantages to ownership

Owning your commercial property means that you will have to pay significantly more money upfront in terms of the down payment and other purchasing costs. There also is the potential that your property value will depreciate over time.

If a particular property has any difficult to move equipment or other features that make it challenging to move, it can end up consigning a business to just that location if the property is purchased. It can also be inconvenient to have to deal with property management responsibilities while trying to run a business. It should be noted, however, that even when leasing a property, business owners may be responsible for some or all of its property management requirements.

A Fort Lauderdale commercial real estate attorney can advise you on a decision

Your decision to lease or buy has to be justified based on several other factors outside of the benefits and disadvantages mentioned in this article. If you’re caught between the decision of leasing or buying a commercial property, talk to a Fort Lauderdale commercial real estate attorney for expert advice on your particular situation. It’s advisable to never rush into any commercial real estate deal, as making a mistake with your decision can end up being costly and difficult to remediate.

Mark Schecter can help you find the right commercial property for your business and give you expert advice on your situation. Contact Schecter Law today at (954) 779-7009 for a consultation.