Buying a business property can be a worthy investment for your business’s future growth and success. However, before you commit to purchasing a commercial property, understand the tax and financial elements of owning such property to help you stay well-informed and plan. This article will help you understand why buying a business property is better than leasing. Keep reading to learn more.
1. Long-term investment
Owning a commercial property is a good investment, but running your business in your commercial property is even greater. Looking for a commercial property for sale in a high-demand area will guarantee your value increase over time.
If ever you wish to sell your property together with the business, its value will have tremendously increased, thus giving you more money. You can also choose to sell the business and lease the property for a steady flow of income.
2. Tax benefits
Buying a commercial property helps you enjoy tax benefits associated with property ownership, unlike leases. You also get depreciation allowances and deductions in mortgage interests. That lowers the overall taxable income, boosting cash flow which you can reinvest in your business. To further understand these benefits and their impact, consult a financial advisor.
3. Eases financial planning
Unlike lease agreements, whose costs vary due to renewals, owning a business property helps you easily plan for the future, since most costs are fixed. You’re able to efficiently plan for the long-term without worrying about lease cancellations or increased lease payments.
4. It gives you control and freedom
When you own a business property, it gives you control and freedom over any modifications and changes in designs that you deem fit for your business. You don’t have to seek anybody’s permission or follow laid-out guidelines; you can customize the property to suit your business needs.
5. Generation of rental income
If your business property is big enough to accommodate other businesses, renting it out or leasing can earn you a steady flow of income. The income generated can help you expand your business, pay for your mortgage loan or lead to your commercial property breaking even.
6. It helps free up working capital
If you finance your property purchase well, you’re able to free up working capital by reducing monthly installment outlay. You can reinvest cash flow you get back to your business to boost growth.
7. Low-cost financing
If you’re buying using home loans, the cost of financing is low due to low interest rates. That means that you may end up paying a monthly amount equal to that of a lease. The advantage of servicing your home loan rather than a lease is that you eventually own the building.
8. It can serve as collateral
Owning a business property comes in handy when you’re looking to expand your business, but you don’t have enough capital. You can use your commercial property as collateral to seek equity or debt financing.
9. It secures your retirement
Owning a commercial property is an excellent way to invest for your retirement. You can channel the benefits you get from tax reliefs, mortgage deductions, and rental income into a fixed account to help secure your retirement.
Owning a business property can be advantageous for you and your business in the long run. Invest in commercial property and reap the benefits that come with it.