If you’re in the market for a commercial or residential property, then perhaps the biggest lingering question is if you should rent or buy. In order to better inform your potential decision, read through the advantages of each choice for both property types.
Should You Rent or Buy Commercial Real Estate?
Renting
Keeping Your Options Open
If you’re a relatively new company, there might be a temptation to go big on a commercial property in the hopes that it will jumpstart your business. However, growth isn’t always clear in the beginning and there is always a lot of uncertainty.
When you rent a property as opposed to owning it, you keep your options open because you’re only locked in for the short-term. If there comes a time where it’s absolutely essential that you move your company, renting will make for a much easier transition.
Safeguarding Your Cash Flow
When you’re leasing property, there‘s no down payment. Without this hefty expenditure, you will be able to protect your budget and save on cash reserves. Therefore, you can funnel the money that you saved into expanding your business.
Also, the property manager or landlord is responsible for all repairs, saving you money that would otherwise be used for maintenance.
Buying
Looking Out for Your Dividends
When you buy commercial real estate, you are essentially investing in that property with the hope that it will pay itself off in the long run. If you are buying low right now, then perhaps over time you will see its value appreciate. Due to current low interest rates and prices, it is a perfect time to buy.
Also, when you own a property, you have the option of refinancing and, at some point, paying off your complete mortgage balance, putting an end to all monthly payments. Rent is subject to upsurges, so owning could also save you money in the end.
Answering to Yourself
When you buy a property, you become the sole owner and landlord. This means you have complete control over the entire space and you will be able to do whatever is best for your business without having to go through anyone else.
Residential Real Estate: Rent or Buy
Renting
Staying Mobile
Renting a home is ideal for those who might want the freedom to move to a new location at their convenience. When you rent a property, you are not tied down to any long-term commitment, so you have more flexibility.
Besides, you never know when your financial situation could change. Without a mortgage, you can alter your living quarters based on any fluctuations in your income or circumstances.
Monitoring Costs
Just like commercial real estate, there is a landlord/tenant dynamic when you rent property. That means that you will avoid most fees associated with mortgages, repairs, maintenance, accounting, and general property management.
Owning
Monitoring Your Assets
When you own a home, there are chances to control your finances through potential appreciation and inflation. The value of homes are rising everywhere. Someday, you might be able to sell your home for much more than you bought it for. Also, with inflation protection, you can ensure your monthly mortgage payments stay fixed and never change.
Being a Homeowner
There is a certain satisfaction that comes from owning a home. For most, if not all people, a home is probably the most expensive thing that they’ll buy in their lifetime. It’s something to be proud of and cherish.
It’s also completely yours and fully customizable to suit your vision for a perfect living space.
