BUYING BENEFITS
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Interest on the mortgage loan is tax deductible
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Changes can be made to the building to accommodate your business
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You can take annual depreciation deductions on taxes
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No rent increases
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You can benefit if you sell when the market is good
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If you end up with excess space, you can lease out the extra
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No set hours of business
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You can stay at that location as long as you wish
BUYING DISADVANTAGES
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Usually requires a lot more initial capital to secure financing
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Property values may decline
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Owning real estate subjects the owner to various legal and regulatory risks not associated with leasing
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Requires owners to invest much time and energy in matters that are not its business, unless property is part of a unit owners association
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Inexperienced owners operate their real estate inefficiently and increase operating costs.
LEASE BENEFITS:
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Credit ratings are not quite as crucial compared to buying.
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Don’t need to worry about selling if moving to a new location
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Your monthly rent is a tax deduction as a business expense.
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You have the freedom to sublet or move if need be at the expiration of the lease.
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No loss if owning in a bad market.
LEASE DISADVANTAGES:
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Rental rates with annual escalations based on market conditions.
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Loss of the reversion or the value of the property at lease end.
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No equity buildup.
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Tenant may HAVE to move at the end of the lease.
