Buying vs. Renting Your Business Property

Here at Jones Aur Commercial Real Estate, we pride ourselves on serving as a resource for Memphis’s outstanding small business owners. One central question regarding small businesses is buying vs renting your business property.

Like most things in life, there isn’t one simple answer! It all comes down to your specific circumstances when weighing buying vs. renting your business property. But what are those circumstances? In which cases might it be more favorable for me to buy, or should I rent for the time being?

That’s what the subject of this reading is all about! We’ve laid out a list of some of the pros and cons of each so you can consider how closely your situation aligns with the following general guidelines. Read on!

Why Renting Could Make Sense

Given unlimited capital and flexibility, buying would most likely always be the best option. Of course, we don’t live in an ideal world, and capital is not unlimited for most of us. That being said, a few great reasons to consider renting include:

  • Your business is in the early stages, and it’s still unclear how quickly you might need to upsize.
  • The market is unstable, so giving yourself the financial flexibility of renting makes sense.
  • a down payment would represent an outsized expenditure for your budget
  • Your customer base is located in a particular region in which leasing is the only option, or you are new to a market area and unsure whether it will grow your business.
  • If timing is a significant factor and you require an immediate space within 30-60 days. In this case, renting could be a great option, as buying is a larger commitment and shouldn’t be rushed into.
  • The opportunity to lease under highly favorable terms presents itself. Sometimes, a deal is just too good to pass up!

When to Buy

As mentioned previously – much of the time, if you can buy your property, you should buy your property. After all, real estate is an investment, and your commercial space could become a valuable asset down the line! Here are a few great reasons to buy:

  • You are free to do what you want with a space, without answering to a landlord.
  • As mentioned previously, an owned property is an asset and can go a long way towards building wealth.
  • The Small Business Administration offers loans with a 10% down payment to buy a commercial space in many circumstances.
  • The commercial property can often be a fallback in the event the initial business fails. It can be rented, sold, etc.
  • Commercial property ownership often comes with certain tax benefits (be sure to consult your accountant).

Buy Or Rent, We’re Here to Help!

Unsurprisingly, the decision to buy or rent your commercial property doesn’t have one simple answer. Individual circumstances such as budget, goals, timeframes – all are going to matter when it comes to making that decision, and everyone will want and need differeånt things. One thing that does come with an easy answer is whether or not the experts at Jones Aur Commercial Real Estate can help you with this decision and any others you might have – absolutely! We’re here to help small business owners like you, so give us a call today!