“Should I buy or lease?” is a question all small business owners grapple with on the road to making their dream a reality. The truth is, there’s no “one approach fits all” answer that will work in all situations for all businesses, but here are four benefits of leasing to consider when making your decision!
Focus on What Matters
When you lease your commercial space, you’re free to concentrate on your business rather than the responsibilities of ownership. Buying your commercial space requires you to budget for maintenance and the possibility of major repairs (ie. replacing a roof) when your time and energy is better served concentrating on growing your business. Why focus on maintenance costs, upkeep or insurance requirements when you’re already working untold hours trying to make your business a success?
Keep Your Assets Liquid
Leasing your commercial property requires a much smaller initial investment to get your business up and running, tying up less of your assets because there is no massive down-payment required to move into your new space. A typical commercial mortgage requires a 20% down-payment on the loan, which can have a tremendous impact on cash-strapped businesses. With a leased property, tenants simply need to provide a security deposit and first month’s rent before setting up shop. That money you save at the outset can instead be invested directly into growing and expanding your business.
Leasing offers more flexibility for you to make decisions tailored to guarantee your business’s success. It is often easier to afford a leased property in a prime location than qualify for a commercial real estate loan, allowing you to more easily reach your customers in the location that works best for your business. Also, when the time comes when your business grows enough to necessitate moving or expanding, you don’t have to commit business resources to managing the sale of your old property.
Another advantage of leasing are the deductions you can claim when it comes time to report taxes to the IRS. You can deduct lease payments, property insurance and taxes, and utilities while commercial property owners can only deduct their mortgage interest. Leasing your space will also make filing income taxes more simple each year than owning your business property.
Whether you’re just starting your business or looking to expand, we have properties available to suit your needs. Please take a look at available commercial spaces in Lancaster on our website to see how Prospect Leasing & Management can help!