Buying Vs. Leasing Commercial Real Estate for Your Business

When you decide to go into business for yourself, you’ll have to make all kinds of decisions that could impact your chances of success. You’ll have to choose between lenders, investors, partners, and other options for funding. You’ll have to select vendors and form a supply chain. You’ll have to set prices for your goods or services that are both competitive and profitable. But before you can even open your doors and launch your operation you must first find a location from which to conduct business. And this means deciding whether you want to buy a building or lease a commercial real estate space. There are a few things you’ll want to consider before making your choice.

The two main things that are likely to have the most effect on your business when it comes to real estate are location and cost. In terms of location, you’ll want your business to be in a spot that is central and easy to access. If you run a retail operation, you might prefer an area that has a busy intersection and gets a lot of foot traffic. In this case leasing a commercial space in a strip mall could be a great way to get people in the door, especially if you find a location that features complementary businesses. Or if your corporate operation is small, it might make more sense to lease a floor in an office building rather than taking on the debt of a mortgage.

On the other hand, you may have the capital available to secure commercial real estate location that is solely for your business, and it might make sense to do so. If, for example, you’re working on proprietary software and security is an issue, having complete control of your commercial space could be of the utmost importance, and you may factor this into the costs of your startup. But of course, you need to crunch some numbers and see what kind of financial conditions are going to be most suitable for your situation. For most small businesses, money is tight, at least in the beginning, and you need to be realistic about what you can afford, especially if you don’t start earning right away.

The fact that you can always change your mind later on with a lease also bears consideration. Finding a killer location is important, but not if it’s going to break you financially. So if you’re not sure about your ability to carry a mortgage on your commercial property, it’s probably best to start with a lease, build up your business, and think about growth and expansion once you’ve realized some measure of success.

You have a big decision ahead of you when it comes to buying or leasing commercial real estate, and you might not know which is better for your business. If you’re unsure how to proceed, think about talking to an experienced agent at a reputable firm like Loeb Properties that specializes in commercial real estate. This professional should be able to advise you on the pros and cons of buying versus leasing so that you have all you need to make an informed decision.

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