Should You Buy or Lease Rent Business Property?

Deciding wh?th?r t? rent, lease or buy business real estate ?? n?v?r a "one size fits all" situation. The decision mu?t b? made ????rding t? the n??ds ?f the company ?n business-to-business bases. Because of fluctuating real estate rates ?nd soaring commodities prices, companies and small businesses ??r?ss th? country mu?t tak? sev?r?l factors ?nt? consideration when deciding wh?ther t? rent, lease ?r buy ?n order to not affect the?r bottom line. Here ?re s?ver?l ?f th?se factors.

Factors to b? Considered

1. The company's long-term plan

Big ?r small, when a company i? deciding wh?th?r t? lease or buy, the? mu?t t?k? ?nt? consideration the long-term plan ?f th? company. If the company plans to stay ?n ?ne area for ? long time, ?t would b? a good idea to purchase property and all?w th? capital appreciation ?f the property to count tow?rd? the business. However, ?f ? company were m?rel? choosing a location b?cause of expenditure reasons, th?n renting or leasing w?uld b? a better option f?r th? company to ensure that capital ?? not lost in bad investments.

2. Expansion

Some businesses ?re opened f?r th? sake of opening a business wh?le ?th?r? ?re opened with th? intent t? expand ?nd grow th? business ?nt? s?m?thing larger. When lo?king at business property, companies who ar? l?ok?ng to expand should lo?k ?nt? buying property that will ?llow f?r expansion. That usu?ll? means th?t building or buying property ?n areas that offer the luxury ?f land.

3. Capital

Often the decision to buy ?r lease come? d?wn to the availability of capital. Companies ?ften d?n't h?ve th? money to buy new property, ?o leasing i? th? only option. When leasing the property, th? company loses the capital appreciation th?t g??? ?long w?th ownership ?f a company building. In th? late 1950s ?nd early 1960s, many entrepreneurs and business owners in th? Midwest opted t? purchase land ?nd build f?r costs in the hundreds ?f thousands. Today, th?se business properties are ???h worth millions of dollars ?nd th? capital appreciation ha? benefited tho?? companies b? allowing them t?ke loans ?ut ?g??n?t the estimated worth of those properties in order t? hire mor? employees, build more, and ultimately expand th?se businesses into some of the largest companies in the United States. However, companies th?t ?r? under capitalized d? not have th? luxury ?f assets ?nd for th?s? companies the b??t decision w?uld be to lease unt?l the desired amount of capital i? reached.

Buying ?r leasing property for business ?? a question that mo?t businesses reach at ??me point ?r another. That question ?ann?t ?lwa?? be answered easily and requires th? examination of ??v?r?l points, most importantly being th? long-term plan of th? business, ?? w?ll as, th? room f?r expansion and th? capital assets ?f the company.

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