Also, three- to ten-year leases are much shorter than loans that can span up to twenty years or so. It provides the company with more room to make dramatic changes to its long-term company plan. A purchase can be sold if need be; it’s just another lengthy process.
Less Time Spent Managing Aspects of the Space
This is the other massive reason company owners don’t want to own their own property. The time and effort they spend on it is significant. It’s completely on you to manage and make sure the inside is built-out as you want it, instead of on the landlord. Dealing with maintenance and repair issues also now falls on your shoulders. If you have tenants, this point rings especially true. Dealing with them and their needs will cut into the time that you or whoever is in charge have to work on the business.
CONS OF LEASING COMMERCIAL PROPERTY
It’s Not Your Investment
If you don’t own it, there is no long-term equity for you and your company to build. There is no appreciation on the property that will come back to you when you refinance or leave. This, in turn, reduces your income potential. Not having the option to rent out open space will reduce your immediate income potential. Instead, you will help your landlord build equity.
There Are No Set Costs
Your rent could be subject to escalation, the amenities may go up for no reason, and other fees may rise and fall. It’s harder to map out a long-term plan with this going on.
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