Guide
Lease or Buy: Deciding Where Your Business Should Live
Leasing keeps capital in the business and the location flexible; buying fixes the occupancy cost, builds equity and keeps you from being displaced at renewal. Neither is right for every business, and the honest comparison is the one most owners never run: the all-in monthly cost of owning against the all-in cost of leasing, over the years you will actually stay.
Ask a Commercial Specialist · (786) 914-1017
When Leasing Wins
A business that is growing fast and may outgrow any space, one that needs its capital for inventory, staff or marketing, one that may relocate, or one in a market where buying would mean a worse location. Leasing also suits a business whose space needs are specialised enough that it wants the landlord to carry the building.
When Buying Wins
A stable business that will stay ten years or more, one whose owner wants the equity and the fixed cost, one in a market where rents rise faster than ownership costs, and any business that cannot afford to be displaced: a restaurant with a hood and a following, a medical practice with a build-out, a shop with automotive zoning. An SBA 504 loan makes the down payment reachable for many.
Running the Comparison
Ownership: the loan payments, property taxes at the post-sale assessment, insurance, maintenance and reserves, less the tax deductions your CPA confirms, and the equity built. Leasing: rent with its increases, the nets under an NNN lease, the build-out beyond the allowance, and the renewal risk. The cost-to-occupy and SBA 504 calculators give the figures; put them side by side over the years you expect to stay.
A Third Way
Buy the building in a separate entity and lease it to the business, which keeps the real estate out of the business when you sell the company and can be sold separately or kept for income. Owners who later want the capital out use a sale-leaseback. Your CPA and attorney structure it.
Ask a Commercial Specialist
Call or text (786) 914-1017 or email sales@breakthrurealty.com. A licensed BreakThru Realty agent follows up within one business day.
Frequently Asked Questions
- How much do I need to buy a commercial building?
- With an SBA 504 loan, often about ten percent of the project plus closing costs, for an owner-occupied building; more for a start-up or a special-purpose property. Consult an SBA lender.
- Is rent or a mortgage payment tax deductible?
- Rent is generally a business expense; on an owned building the interest, taxes, operating costs and depreciation are, in different ways. Your CPA confirms the treatment for your business.
- What if I buy and then outgrow the building?
- You can lease it to another business and buy or lease a larger one; a well-located commercial building is an asset either way. The resale and lease-up prospects are part of the purchase decision.
Commercial Services
Calculators
Commercial Guides
- Gross, Modified Gross and Triple-Net Leases
- CAM Charges Explained
- Tenant Improvement Allowance
- Personal Guarantees
- From Letter of Intent to Lease
- Zoning and the Certificate of Use
- Phase I Environmental Site Assessment
- SBA 504 Loans for Owner-Users
- Opportunity Zones in Florida
- The Live Local Act for Owners
- Commercial Closing Costs in Florida
- Commercial Property Tax in Florida
- How Commercial Property Is Valued