Commercial Property Which is Better Buying or Leasing

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Commercial Property Which is Better Buying or
Leasing?
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One of the most pertinent question in the
commercial real estate sector is whether buying a
commercial property is profitable or leasing it
will be convenient.
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There are a host of advantages in both of these
options, but as an investor, you need to
understand the clear difference between them.
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Many investors argue that buying a commercial
property will prove to be a cheaper option in the
long run and will also help you in acquiring a
loan in the long run.
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However, there are still many people who will
prefer leasing a commercial space for their own
benefits.
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Let us look at the advantages of both buying and
leasing a commercial property.
Advantages of buying
Advantages of leasing
No advance capital requirement Maintenance Risk
factor Location
Equity Consistent cost Tax savings Income
generation
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Advantages of leasing
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No advance capital requirement
One of the biggest advantages of leasing a
commercial property is that there is no
requirement of advance down payment.
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Maintenance
The maintenance of any commercial property is a
huge burden and if you are leasing the commercial
space, then the owner will be responsible for at
least a portion of the expenses.
However, you will be responsible for maintaining
the interior space and the major expenses of
maintaining the outer space will be borne by the
landlord.
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Risk factor
There is a possibility that the real estate value
in a particular market may be stagnating or even
decline and in the event of a decline, the lessee
will not have any stake in the property at risk.
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Location
Most of the time, buying a commercial property in
a prime location can be costly and leasing will
provide you with a more viable option of
obtaining a property in a desirable location at a
lower price.
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Advantages of buying
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Equity
The biggest advantage of buying a commercial
property over leasing is the equity combines in
due course of time and it can be used as a line
of credit to fund future expansion.
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Consistent cost
When you buy a commercial property your cost will
remain constant and if you avail a loan to buy
the property, the monthly payments will remain
the same throughout the loan period.
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Tax savings
The purchase of commercial property offers
tremendous tax advantages as you are allowed to
deduct the yearly depreciation of your property.
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Income generation
If you own a commercial property, then you can
always rent it out for generating a constant flow
of income throughout the year.
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Conclusion
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These are the advantages of leasing and buying a
commercial property and you must give a careful
thought to both of them before going ahead with
your investment plans.
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