The debate between whether to buy or lease commercial properties has been going on for a long time, with others preferring the former while some the latter. The truth is most business is usually better off leasing the commercial properties even though they share the dream of buying the buildings. This is because of the extraordinary advantages associated with leasing that buying cannot extend. Opting to stay a tenant instead of owning your commercial premises may not seem like a smart idea to some, but should to you if you factor in the long-term plan. If you are still undecided between buying and leasing a commercial property, here are a few reasons why you should choose the latter.
Leasing commercial properties is associated with reduced move in costs; if you compare the cost of moving into a leased property and purchasing, the former is always affordable. This is because a tenant is required to only provide a security deposit and the initial rent, whereas buying comes with a lot of expenses. Location and size flexibility is another advantage of leasing over buying a commercial property. Since you are expecting the needs of your business to change as it expands, making the necessary moves will be easier when you are leasing the property. You can easily pack and go if you need more square footage to accommodate your growing manpower.
There is minimal liability associated with leasing of a commercial property compared to buying. A tenant will only be concerned with insuring the space they are renting instead of the entire property as would be the case if they purchased it. You are only liable for the interior space because of the repair and maintenance costs are covered by the owner’s insurance. Most tenants find that leasing is a better deal on a month-to-month basis, meaning lower monthly occupancy costs.
With leasing of a commercial property comes the ability to stay focused, something most people are unaware of. Buying a property means you have to master the real estate market or hire a team to be in charge of that whereas with leasing, you get to stay focused on your main line of business. Leasing commercial properties leaves you in the driver seat every time the lease expires; you can choose to renew or relocate to a different property based on your current needs, without worrying about finding a buyer for the property.
Reduced capital expenditure liability is another reason to choose leasing over buying of a commercial property. Being a building owner means you have to invest constantly to ensure it remains aesthetically appealing and attractive which can be expensive especially if it is approaching the end of its life. But if you are a tenant, none of these expenses are extended to you; you can always move to a better property when your lease expires or realize your needs are no longer met. Finally, it is a simple way of having cleaner balance sheets; it is shown on your expenses monthly. These are the advantages of leasing commercial properties.