How to Decide Between Buying and Renting Your Place of Business
Is It Better To Buy Or Rent A Business Location
One of the biggest decisions you will make as a business owner is choosing between buying a property for your place of business or renting.
The decision will impact your business in several ways, for better or worse, when it comes to flexibility, tax benefits, upfront and long-term costs, and many other considerations.
If you are planning on either option in the South Florida market, it’s always a good idea to discuss your ideas with an experienced Fort Lauderdale commercial real estate attorney to ensure you make the best decision.
Below are some tips to help you get started:
Compare the cost of both
It’s a good idea to perform a full financial analysis on the entire rough cost of leasing or buying. As many will tell you, the top benefit of leasing is the fact that you won’t have to spend nearly as much money upfront.
In the long term, you will likely end up paying more, however, especially if you plan on being in your location for several years. If you purchase, you do have more upfront costs and frequently maintenance responsibilities, but you get to enjoy appreciation on the property and tax benefits.
Are you a new or established business?
If your business is relatively new, it’s often a good idea to consider leasing a location first that is well within your budget. This way you can gather some financials, minimize your upfront risk, and determine what type of location will suit your business best.
Purchasing a property requires a long-term commitment to get the most out of your investment, along with the expenses mentioned above. It can also be riskier to make a commercial property purchase when you aren’t 100% sure that it’s a location you will want to stay at 3-5 years down the road.
Do you want more control over the property?
If you are planning on making substantial upgrades or renovations to the property, in many cases you may have no other option than to purchase it. When you own the property you won’t have a landlord looking over your shoulder for every change, you’ll only have to deal with licensing and zoning, etc.
However, some agreements may also allow you to make modifications to the property, sometimes extensive.
There are many points to consider, and in any case, it’s always wise to meet with an experienced commercial real estate attorney in Fort Lauderdale to help you make a final choice.
Call Schecter Law today at (954) 779-7009 with any questions you may have about deciding between buying or leasing for your business location in South Florida.