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Leasing vs. Owning a Building

How does a business owner decide?

If you own a small business, you might be wondering whether you should lease or own your property. One of the most frequently asked questions we receive from clients is, "Should I buy, build or lease a commercial building?"

Well, like many other things in life, the answer is, "It depends." There are pros and cons with either option that a business owner should consider. 

Reasons To Consider Leasing

  • Your business is growing and you are not sure how quickly you will outgrow the property.
  • Business market conditions are unpredictable. Committing to a short-term lease gives you peace of mind.
  • Your business is new or in its early stages. 
  • Your timing and need for space are immediate.
  • Liquidity is tight and you don’t have enough for a down payment.

Reasons to Consider Owning Your Own Building

  • Leasing has a lower upfront cost but can cost significantly more over time in comparison to owning the property.
  • You are not subject to annual lease rate increases.
  • You can own your own building for as little as 10% down with an SBA 504 Loan.
  • With financing provided by CMDC, monthly payments associated with owning vs. leasing are often better.
  • With owning, you benefit from the building’s appreciation; with leasing, your landlord receives the benefits.
  • Owning your building can provide you the opportunity to lease any unused space, thereby improving your cash flow and lowering your occupancy costs.
  • The equity you build over time from owning your building can be part of a long-term retirement plan.
  • Owning your building has significant tax advantages that leasing simply doesn’t provide.

Let the professionals at CMDC help you decide. Contact us today for a free consultation.