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Posted almost 8 years ago

To Buy or Lease

To Buy or Lease
by Fred Myer

When it comes to your business you can find yourself up against some tough decisions, and whether to buy or lease your commercial space is definitely one of those decisions. We have a very dynamic real estate market right now in Northern Nevada, vacancy is dropping very quickly in most of our commercial sectors. We at Myer Realty are finding it more and more difficult to locate spaces for our clients to house their businesses! Having said that, if you are in the market for a piece of real estate to house your business, the decision whether to lease or buy is a critical question you need to answer. Either way you'll want to ask your commercial real estate professional and accountant, some questions;
1. Should I use the available cash I have now and lock it up in real estate? Or retain my cash as working capitol?
2. Do I really need to own today, or is it more important that I stay liquid with my cash for those unforeseens and so I don't end up getting cash strapped.

Keep in mind that there are some benefits that come with ownership. The first one being security as an owner, no one can raise your rent or ask you to leave if you are an owner, user, buyer. Secondly, the interest paid on the loan is a business deduction, you as the owner get to build the equity in the property. And thirdly, the ownership of the real estate where your business lives gives the owner stability, and therefor increases your financial strength for the possibility of future growth. The equity built becomes a source of money that can help an owner maneuver more freely later on in his business. If you already own the real estate that houses your business then for you there is a sale lease back, this option can benefit a business owner in a few ways, firstly this is a great way for your company to generate cash to improve your businesses balance sheet. And secondly, sale lease back is a solid tactic that can generate dollars if your business is cash strapped, or if you are looking to expand a growing one.


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