Should You Buy Or Lease A Commercial Property?

Most entrepreneurs and small business owners wonder whether to buy or lease a property. While both renting and leasing have pros and cons, making the right decision is crucial. A few factors, including budget and period of usage, determine which option fits your firm,

Below are reasons why you should consider leasing or buying a commercial property.

Why Consider Buying?

Long-term investment: After purchasing a commercial property, you’re the owner and can focus on investing. Whether your property is an apartment building, a warehouse, or an office building, you’re assured of returns after a few years.

Full control: Leasing means that the landlord runs your property. Thus, you may experience problems if you fail to follow what you agreed on in the contract with the owner. Buying means that you make the rules because you run the firm.

You can sell the property: If you’re running a business on your property, you can choose to sell it if you find a potential buyer. Again, if the property is large, you can lease part of it and enjoy monthly fees as the landlord.

Why Consider Leasing?

Unstable market prices: Commercial properties market prices are unprecedented, whether in cell tower leases or retail. Several factors influence market prices, including interest rates, neighborhoods, and size. Thus, the advantage of leasing a commercial property is you don’t have to worry about unfluctuating and unstable market prices. 

Fast-growing business: If you’re a new entrepreneur and your brand is fast-growing, you can consider leasing instead of renting. This way, you can move to a bigger property if your business has outgrown your current property.

Cons of Leasing a Commercial Property

Despite the advantages, there are several disadvantages of leasing commercial property, including:

Complicated Lease Terms

Whether investing in cell tower leases or an office, you may need help with the terms and conditions set by the landlord and the law. Thus, you might need to hire a lawyer when dealing with a lease property.

Upfront Capital

In leasing commercial property, such as cell tower leases, you need to pay upfront fees to banks and lenders, which is a risky process requiring a broker’s knowledge to avoid scammers. Failure to pay may lead to harassment and frequent phone calls, which disrupt your day.

Cons of Buying a Commercial Property

Several disadvantages of purchasing a commercial property include:

You Need a Property Manager

Commercial properties require frequent maintenance, especially when dealing with tenants. Hence, you may need a property manager who listens to complaints from tenants and employees, such as broken pipes and leaking sinks.

More Risks Involved

Risks such as fire hazards, trips, falls, and faulty electricity. Thus, you need to license and insure your property to protect your commercial property in case of such accidents.

Final Thoughts

Whether you lease or buy a commercial property, you enjoy certain advantages and face several problems. Thus, consider the upfront fees, lawyer fees, budget, terms and conditions, and market prices before deciding whether to lease or buy the property.