As a business owner, one of the biggest choices you will make is whether to keep leasing your space, or finally buy a commercial property of your own!
But commercial real estate is rarely cheap. This is a big decision and you have a lot to consider, but there’s a case to be made for owning vs. renting your commercial space. If you decide to pursue this option, there are lending solutions available to help you achieve your goals.
Advantages of Owning vs. Renting Commercial Property
As long as it’s maintained properly, commercial real estate will hold its value over time as a long-term asset. If you are thinking of buying vs. leasing, here are some of the advantages of that option.
Even if you take out a loan, your downpayment and monthly payments will immediately start building equity in the property. If you sell or refinance the property, your equity will equal the difference between the fair market value of the property and what is remaining on the loan balance.
Own an Appreciating Asset
You get the benefit of capital appreciation when you own commercial real estate. This refers to the increase in the value of the property over time. The rate that a property’s value appreciates depends on a variety of factors like supply and demand, the inflation rate, and interest rates.
Earn Rental Income
While you’re not renting commercial space, there’s nothing that says you can’t become a landlord and start earning extra income from your property. As long as you occupy at least 51% of the property, it’s not classified as an investment by the lender. So, if you have some additional space, there’s no reason you can’t rent it out to help pay for your loan and any improvements.
Get Tax Breaks
As a commercial property owner, you can deduct depreciation and interest on your business taxes.
When you lease, you have to follow a lot of rules and don’t have much control over your space. As the owner of the commercial property, you can decide how to configure the space (within zoning restrictions) so that it best suits your needs.
Try This Lending Solution to Own Your Commercial Space
If you’d like to own your commercial space instead of renting it, CAB Capital Group can help. We are an independent broker that assists clients in finding the best commercial financing solutions to meet their credit profile and particular goals.
We can help your business access SBA loans from a national lender with a proven track record in real estate acquisitions. Some of the features of these loans include:
- 10 to 25-year term with no balloon payments
- SBA 7(a) $250,000 to $5 million
- SBA 504 up to $8 million
- Closing within 45-60 days
If you went with a conventional commercial mortgage, you would face a lengthy application and closing process. And some of those loans require a significant down payment. CAB Capital is not a traditional bank. Because we have more options to choose from, we can offer more flexible terms, better rates, and faster closings. Contact us today to learn more.