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Purchasing versus leasing: The benefits of each in real estate

When you're considering whether you want to lease or purchase a facility for your business, you need to consider a number of possible benefits for each. Leasing can be a great option for new businesses, but owning a building can also be a long-term investment. Here are some possible benefits to consider for leasing or owning a property.

The main advantage of leasing is that it costs less up front, which is good if you're only starting the business now and have limited funds. If you don't have a credit rating good enough to support a mortgage, leasing can also be a positive option for your business. Rent is deductible as a business expense, so the tax implications are positive. The landlord must maintain the property, and you may be able to obtain a lease well below what you'd expect to pay for a mortgage.

The main advantage of purchasing a facility is that you will pay less over time than if you leased, and you will also benefit from the appreciation of the property. If you find the perfect location for your business and no buildings are for lease, a purchase may make it possible to get into the area to establish your business and not have to move later on.

You get a lot of control when you purchase a building. If there are renovations you want to make or if you want to sell and earn money back at a later date, you have the ability to do so.

All these are factors to consider. If you're thinking of signing a contract, your attorney can help you make sure the purchase and contract is legal.

Source: FindLaw, "Factors to Consider: Lease or Purchase of a Facility," accessed July 20, 2016

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