May 16, 2019

Buying Versus Leasing Commercial Real Estate

If you are in the market for commercial real estate, you’ve probably thought about either buying or leasing. Both options have their own unique sets of advantages and disadvantages. It’s worth spending a good amount of time thinking about which option is right for you before you even start searching for available properties. Below, we will be discussing the difference between buying commercial property for sale or leasing commercial property for rent.

 

Buying Commercial Real Estate

A big plus with buying commercial real estate is that the asset has the possibility of appreciating over time. That means that your investment in commercial property for sale can pay off in a big way. You can also rent out a commercial property to get some steady monthly income coming in. There are also plenty of tax benefits and equity upside associated with buying commercial property for sale.

The downsides to buying commercial real estate have to do with the initial investment as well as the added liabilities. When you buy, you will have to come up with a large amount of capital to make your purchase. There are downside risks with any investments, and commercial real estate is no different. If you are interested in purchasing commercial property for sale and want to minimize the downsides, you should work with a great commercial broker like Rakow Group.

 

Leasing Commercial Real Estate

If you are looking for a little more flexibility with your commercial real estate, leasing might be the right option for you. Leasing offers you more liquidity and flexibility thanks to a lower initial investment and lease terms that can be for pretty much any timeframe. You can also get some nice tax benefits when you lease commercial property for rent. You can typically deduct things like lease payments, property taxes, and utilities from your taxes.

One of the primary downsides to leasing commercial real estate is that there isn’t any investment potential. You will also be paying higher monthly payments and not have the same control that you would if you owned the property outright.

We hope this article has provided you with some great insight into both buying and leasing commercial real estate. Ask yourself whether you want flexibility or investment potential before making any final decisions. Remember that you can always reach out to a great commercial broker like the Rakow Group for additional insight and assistance.


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