Considering owning your own business building vs leasing one? As a business owner, you are always working hard to make the best financial decisions for yourself and your business. One of the most difficult decisions you may face along the way is whether to own your business building or lease it since both options have various pros and cons. Since there will be thousands of dollars at stake when making this decision, you need to be well-informed. To make the best decisions, remember these three things you may not have considered.
Greater Availability of Cash
If you choose to lease your business building, you may not have realized just how much more cash you may have on a regular basis to invest in your company’s products, services, advertising, or other key areas that will help your business grow. Also, by having more money available each month, you may be able to seriously consider expansion plans for your current location or opening a second location.
You’ll be Paying for Repairs
When you own a building for your business, this means you are the owner in every way possible. Thus, if you need repairs done to your building’s roof because it is leaking, you will be responsible for paying for commercial roofing services out of your own pocket. Also, in addition to paying for your building’s repairs, you will also be responsible for paying annual property taxes and insurance premiums, both of which can be very substantial amounts of money that could otherwise be applied to buy new equipment or launch a new advertising campaign.
Leasing May Offer Better Tax Benefits
While you don’t mind paying your fair share of taxes, this does not mean you want that amount to be extremely high. If one of your biggest priorities as a business owner is to keep your taxes low each year, leasing your business building may be the best option. When you lease your building, your occupancy costs are completely deductible on your tax returns. This will also include the portion of your rent that is always attributed to the value of the land.
In today’s ever-changing business world, making the wrong financial decision for your business can prove to be disastrous. When considering the pros and cons of owning your business building vs leasing, be sure to seek out trusted advice from a CPA and perhaps even a business attorney. By doing so and carefully considering how various aspects will impact your business, you can arrive at a decision that will benefit you now as well as in the years ahead.
