If the small business you started is growing so much that you cannot operate out of your home any longer, you might need some commercial property to use for it. There are two main ways to acquire commercial property for business use. You can lease it or buy it. While leasing might seem like a more affordable option upfront, purchasing commercial property is generally a better choice. Here are three reasons to consider buying property instead of leasing it.
1. You Build Equity in It and Will Likely Experience Appreciation
There are two key benefits of owning property. The first is the equity you build in it. No matter what type of property you buy, you will slowly build equity in it as you make the necessary payments on the loan you acquire. Equity refers to ownership rights.
When you first buy a property, you might not own a large percentage of it. If you finance most of it, the bank technically owns it. Over time, though, the interests change. The amount of equity you have will increase, while the amount of ownership the bank has will decrease.
The second benefit of owning land is the appreciation it experiences. Appreciation refers to the increase in value that property experiences from time. Property today is worth more than it was 10 or 20 years ago. Therefore, the value of the property today is less than the value will be in 10 or 20 years. Appreciation in value is what causes this to happen.
If you lease a building, you will not reap these two benefits.
2. You Won't Have to Get Changes Approved
Another significant benefit of buying property instead of leasing it is the control you have with it. When you own it, you can do what you want. You will not have to get changes approved by your landlord. You get to make all the decisions.
3. You May Have More Tax Breaks
Finally, business owners tend to reap more tax breaks and benefits when they own their property instead of leasing it. You can write off the depreciation of the building each year, and you can write off all the expenses attached to it. When you rent space, you can generally only write off the rental payment you make and a few other costs related to it.
Do you feel that buying commercial property is the best choice for you? If so, talk to a real estate agent for help locating commercial property for sale in your area.