You have outgrown the home office and are ready to seek out some bigger, commercial space; we hear from clients just like you all the time at S&D Realty. They are at a crossroads though, weighing their options on whether to buy or lease commercial real estate in Long Island. The answer is not the same for everyone; here are some things you need to consider that may make you want to lease commercial in Long Island over jumping to buy commercial space.
Why Should You Lease Commercial Real Estate in Long Island?
Upfront Costs
An obvious difference between buying and leasing commercial real estate space is the upfront cost. When buying commercial real estate, there is the appraisal fee, followed by loan fees, building permits, etc. If you are just starting out, you may not have the capital saved to jump into investing in real estate.
The down payment amounts are very different between buying and leasing. When buying, banks need a much larger down payment. For small businesses or startups, the initial capital is not there to support this type of financial decision. When you lease commercial real estate in Long Island, the down payment involved is usually two months’ rent, which is tens of thousands less than the down payment for purchasing. Don’t bite off more than you can chew because you found a deal or want to expand quickly; you may end up sinking your business in the process.
How Established Are You?
If you are a startup or recently established business, you may not be ready to leap into a commitment like buying, so finding a commercial real estate lease in Long Island may better suit you. As a business owner, you must realistically weigh your options. Do you know how well you will perform in a particular area? Are you ready to support mortgage payments? By leasing commercial real estate space, you give yourself more freedom, including the ability to back out at the end of the lease’s term. Maybe you’d fare better in a different area or decide a different space would be more accommodating for your business; leasing gives you the option to figure these things out before being locked in for the long haul.
Growth
The size of your company is a huge decision-making factor when deciding to buy or lease commercial real estate in Long Island. Do you see the size of your company changing in 5 years? Is it probable or impossible? If you are a few clients away from an expansion, you don’t want to get locked into a space that can’t handle the extra staff, equipment, or merchandise.
Whether you are ready to lease commercial real estate in Long Island or are big enough to buy, we can help point you in the right direction. One of the strengths of S&D Realty is our ability to evaluate real estate in terms of highest and best use, feasibility and investment performance. For more information on investing in commercial real estate, don’t hesitate to give us a call at 516-248-6905. We look forward to hearing from you!
