How Buying is Better Than Leasing
Benefits to small business owners on owning commercial real estate
Commercial real estate ownership offers several advantages over leasing for business owners. In this article, let's explore why owning commercial real estate can be a smart investment for businesses.
Equity and Appreciation
When you own commercial real estate, you have the opportunity to build equity in the property. As you pay off your mortgage, your ownership stake in the property increases, giving you a valuable asset that can appreciate over time. This appreciation can result in significant long-term wealth creation.
Predictable Costs
When you lease commercial real estate, you're subject to rent increases and other costs associated with leasing. Owning your commercial real estate allows you to predict your costs and plan your finances accordingly. This can help you reinvest in your business, increase your profitability, and expand your operations.
Tax Benefits
Commercial real estate ownership offers several tax benefits that can help reduce your overall tax burden. You can deduct mortgage interest, property taxes, and other expenses associated with owning and maintaining the property. In addition, you can take advantage of depreciation deductions, which can provide significant tax savings over time.
Control and Flexibility
When you own your commercial real estate, you have complete control over the property. You can make modifications and upgrades to suit your business needs without worrying about obtaining permission from a landlord. Improvements could add to the resale value, should you need to relocate in the future.
Potential Rental Income
If you have extra space in your commercial property, you can rent it out to other businesses and generate additional income. This can help you offset your mortgage and other expenses, making it easier to manage your finances. Additionally, if you decide to sell the property in the future, rental income can increase the property's value and make it more attractive to potential buyers.
Owning commercial real estate offers several advantages over leasing for business owners. It provides a valuable asset that can appreciate over time, predictable costs, tax benefits, control and flexibility, and additional revenue from leasing. If you're considering purchasing commercial real estate, a SBA 504 loan may be a good option for you. Contact us to get connected with our experts.
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