As a business owner, owning your commercial property can come with many advantages if you’re in the financial position to invest and if it aligns with your personal and professional goals. While the common objective here is to eliminate paying rent and instead make payments towards a building that you own, there are other financial benefits of owning commercial property that can pay off in the long run.
Every business owner should have an exit plan – the strategy that allows you to retire from your business, whether it’s to keep the business going under new management, sell, or liquidate the business altogether. Owning commercial real estate property can be a part of this strategy. Even if you sell or liquidate the company, you own the building and can offer real estate services in the form of commercial leasing.
Keep in mind that real estate is a long-term investment, so this strategy works well for companies in it for the long haul and can see the facility appreciate in value. Years down the road, when the building is paid off, you can continue to generate rental income and hire the help of an industrial property management company to look after the facility and tenant needs while you vacation and enjoy retirement.
While you may be a long way to retirement, you can still generate rental income now by leasing out a part of your commercial building. This can lower your monthly mortgage expenses or help you pay the loan off quicker.
When you’re leasing commercial property, you’re subject to increased rental rates. For some businesses, the fluctuation can make or break their company. However, when you own your building, you’re able to build equity. Additionally, you have access to capital as you can borrow money against the property should you be faced with a situation where you suddenly need extra cash.
Although there are strong financial benefits to owning a commercial property, there are, of course many factors to consider. Whether you’re renting or owning, each comes with its advantages and disadvantages that you’ll need to weigh out and decide what makes sense for your situation right now.
When budgeting for expenses as an owner, you’ll need to factor in unexpected costs. While you have more freedom to customize your space as an owner, you don’t have to worry about major building maintenance and repairs as a tenant. As an owner, you have a higher level of potential liability than you would as a tenant. If your business needs some flexibility to move to a new location, commercial real estate ownership may not be right for you.
The above examples are just a few of the aspects of ownership you’ll need to consider. Take your time and seek the help of professional real estate services to help you come to the right decision.
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