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Buy or Lease?

Many business owners struggle with the dilemma of deciding whether to buy or lease office space. Business consultants or real estate brokers will give you may get conflicting opinions. The key thing to remember is this: Each business brings its own unique situation and concerns to the table, which means the answer may be different for each business owner.
Owning property has a number of benefits for your business, including:

  • Asset appreciation. Property may be a great long-term investment, and the building and surrounding land are assets that almost always appreciate in value.

  • Fixed overhead costs. Along with payroll, a mortgage is one of the highest fixed business expenses.

  • The option to build more space for expansion and/or leasing for potential cash flow.

  • Potential to sublet. If you have space you don't use, you can lease a portion of it, which can help you pay the mortgage or give you additional funds for your cash flow.

You should begin by examining your company's current business plan and earnings forecast, your credit history and the local real estate market. Every business idea needs to be carefully researched before making final decisions.