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Buyers |
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Should you Lease or Buy your next space?
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At some point, as your
business grows or changes, you will be faced with the
decision to either buy or lease your real estate facility. Before you decide, do your homework and
analyze the pros and cons of each alternative. A partial list of pros and cons is provided below:
Advantages of Buying:
No rent increases
Tailor build out to meet the needs of your business
You can stay in the location indefinitelyInterest on mortgage loan may be tax deducible*
Deduct annual depreciation on taxes*
No set business hours
Property will build equity over the long-term
You can sell when needed
You can lease some or all of the space
Disadvantages of Buying:
Typically requires capital to secure financing
Property values may decline
Lock owner into a specific geographic area
Additional responsibilities related to real estate such as maintenance, security, and other management issues
Advantages of Leasing:
Minimal upfront capital
Credit requirements not as rigorous as with purchase
Monthly rent is a business expense for tax purposes
Option to sublet or move at lease expiration
No loss if market drops
Disadvantages of Leasing:
Rental rates escalate annually
No equity build up
Tenant improvements belong to the Landlord
Landlord may force Tenant to leave
At ECCondos.com, we perform a lease vs. buy cost analysis for our clients in
order to help them make an informed decision.
When you are
ready to get started, click here and complete the entry
form. One of our consultants will contact you
to discuss your specific situation.
*Note: remember to always double check with
your tax consultant to make sure your decision is beneficial
from a tax perspective. |
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