Have you thought about buying the location where your company operates? This idea is not very far-fetched, and it is quite possible that you can benefit from purchasing this property that you have been leasing.
This decision must be studied in depth, and the advantages or disadvantages will depend on various factors such as the type of business, sales and current location, among others.
We’ll introduce you to some benefits you and your business could get if you decide to step up and buy a real estate property:
Tax and fiscal benefits
As a the owner of the premises, you could take advantage of some depreciation tax deductions, and of mortgage interest repayments that can offset the cost of your original purchase and ease the tax burden you have each year.
It is important to consult with a tax expert who can point out the benefits and risks of buying a commercial property.
The ability to create equity with your property
One of the main problems of renting a location is that the monthly rent you pay will end up in the owner’s pockets, with no greater benefit to you, but acquiring said location will give you the opportunity to start creating equity on this property.
If your property increases in value, you may consider selling it and making a profit, or renting the property and having a steady flow of cash.
Creating additional sources of income
If you purchase an office, a commercial store or a warehouse, and you will not use 100% of the available space, you might consider renting a portion of it, thus establishing an additional source of income.
These additional revenue streams can be helpful for your company’s low seasons when every dollar counts. It is important that you contact a specialist who can help you set the right value of the space on your property you want to rent.
Appreciation of the real estate value
Real estate investments may experience an appreciation in their value over the years, and you can play an important role in this appreciation.
Keeping the premises in good condition and renovating when needed, or increasing your office’s leasable space, can actively increase the value of your property.
However, not everything is profit, the initial cost of acquiring a business property is probably too high, this will make it not an easy decision to make. It is important that you carefully evaluate the different financing options for purchasing a business property.
Control over the premises and freedom to do
Renting a location offers limited options when it comes to making renovations or drastic changes to the structure of the property. If you like to have control over your property, acquiring a business property is not a bad idea; you can adapt the space as you wish to give it the shape that you consider most beneficial for your business.
Another important aspect is that when you buy a location, you no longer have to worry about contract renewals, and the inevitable increase in monthly rent.