Should You Buy or Lease Your Restaurant Space?

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Should You Buy or Lease Your Restaurant Space?
Most restaurateurs, who need a brick and mortar
location, ask the question of whether they
should buy or lease their restaurant space. There
are advantages and disadvantages either way.
Here are some of the pros and cons to look
at Leasing Your Restaurant Space When you
lease your restaurant space, it is for a specific
amount of time and at a predefined monthly rate.
Of course, there may be certain fees, recurring
charges and various other expenses. But, for the
most part, you can easily budget a specific
amount to be designated for your leasing
expense. Benefits of Leasing When you lease your
restaurant space, you have a fixed cost for a
specified amount of time. You also have the
option to change your lease in the future. You
will typically have a lower capital outlay. You
may also have more flexibility to spend your
initial investment funds on other start-up
expenses, such as marketing, developing your menu
and paying your employees. Challenges with
Leasing If you lease your space, there may be
some limits on the décor of your restaurant. This
may be somewhat reliant upon the support of your
landlord. Its possible that your lease rate
may increase when its time for renewal. Theres
no opportunity to build equity. Also, the
businesses next door may start out great, then
move, and be replaced by neighbors who negatively
impact your business. Buying Your Restaurant
Space Many business owners specifically strive
to own their own commercial property. For many,
this is the ultimate challenge, and is a way to
make sure they have stability for their
restaurant. In fact, owning commercial real
estate, where a restaurant is located, can be a
very wise investment strategy. The owner can
then lease the restaurant space to other tenants
as a supplementary income. The upfront costs for
buying commercial real estate should usually be
higher than what it would cost for leasing
space. Also, this is a long-term commitment and
should only be undertaken after careful planning.
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Further Reading This article is inspired and
based by a blog post published by Restaurant Real
Estate Advisor. For more information about
whether to buy or lease your restaurant space in
Los Angeles, I encourage you to click the link
above and read that article. For any other
questions about leasing or buying commercial real
estate in California, please let me know. Im
always happy to help and look forward to
speaking with you! Article Source
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ease-your-restaurant-space.html