There is nothing wrong with leasing business space. Renting space presents an excellent opportunity for you to determine what works and what does not before committing to the more long-term ownership expectancy associated with physically owning property. It also takes time to save the capital necessary for purchasing or constructing a building.
To add to this, while purchasing commercial property certainly has its perks, it is a complex process. Is it one your business should undertake? Consider these advantages put forward by Forbes.
Build equity with monthly payments
Finance gurus have differing opinions when it comes to renting versus buying. At the end of the day, it all boils down to your financial situation and the market. Renting property may serve smaller budgets best of all. When you can afford to buy, however, paying a little extra to build equity presents a better financial investment. In fact, some owners find such great deals and put down enough so that monthly mortgage rates remain lower than what they paid when renting.
Become the landlord
If you later decide to sell your business, you might decide to rent it to your successor. In fact, even while using your property, if it is big enough, you can rent spaces to others. You could fill your commercial property with tenants that might bring you more business. Say, for instance, that you own a pharmacy. You may choose to rent to pediatricians, dentists and physical therapists.
Diversify your retirement portfolio
It is never too early to plan for retirement. Owning commercial property provides one potential stream of income. Collecting rent as a commercial property owner during retirement may offer you the opportunity to retire comfortably while leaving behind a legacy for your children and grandchildren. If you decide the work behind being a landlord is not for you, you can hire a property manager or delegate the responsibility to another family member.
Owning property does not serve every individual financial situation or every business model. Consider yours carefully before deciding if these are perks worth pursuing.