While commercial real estate in itself is an ever-expanding business, there has, in recent years, been much discussion concerning the benefits of leasing a commercial real estate – as opposed to buying – especially whenit comes to finding office space for less-than-successful businesses or inexperienced startups.
On the one hand, most successful businesses prefer to lease an office block instead of purchasing it, because leasing gives such companies greater operational efficiency and flexibility – if a move is required to draw in clientele, then it can be done quite easily. Additionally, leasing has significant tax advantages as compared to owning the office space. On the other hand, the landlord of an operation can earn monthly income when they lease their commercial real estate – indeed, whether one ought to buy or lease is a difficult decision to parse. The following are the benefits of leasing a commercial real estate to both the landlord and the leasing business.
If you’re looking for new commercial real estate options – and there are plenty, to be sure – you’ll likely be hyperaware of pricing differences; typically, purchasing a new office for your business can be very expensive, which is why most business owners opt for taking out commercial loans – however, doing so requires that the buyer have a particular amount of savings in their account, which isn’t always the cas, and, as always, with large loans come a great deal of interest.
While there are, occasionally, special benefits that one can reap as a landlord, there are also loan fees, as well as other minor expenses incurred when buying a property, which can be costly for a new business. However, when a less-than-successful or newbusiness decides to lease an office space, the building owners require only the payment of the initial rent anda security deposit. Since it is the landlord who owns the building, any cost of improving the leased office space is incurred by them. As such, the leasing fees are attractive to leasers. The monthly cost incurred by leasers is, of course, lower than that of owners.
It should, additionally, be noted that commercial property leases are not included on balance sheets required to keep a business running. What is included, rather, are the expenses of the monthly lease, and because businesses only pay taxes on items that show up on their balance sheets, this means that leasers pay significantly less than a landowner.
No doubt, leasing has advantages for businesses and property-owners alike; it creates a situation where the leaser and landlord can benefit. While buying is considered as the best option when finding office space, facts demonstrate that leasing is a better financial choice. It also involves less responsibility and, as a result, allots more time for a CEO to focus on running their operation to the best of their abilities.