Entrepreneurs faced with buying commercial space instead of leasing must carefully consider the following practical benefits to make a wise decision for their business. The merits can either be short-term or long-term.

Reduced Costs with Fixed Mortgage Payments

Fixed monthly mortgage payments protect your business from leasing rates that are likely to occur annually. Upfront down payment may sound costly, but the long-term benefit of lower monthly mortgage payments of buying commercial space is incomparable. Additionally, owning commercial space means you are able to borrow against the property, the money you can inject back into the business.

Customize the Facility to Suit Your Business

Buying commercial space frees you from the restrictions that come with lease agreements imposed limits on what to do with the property. For example, if in manufacturing, the need to customize the facility is great to meet your needs. The building is then an integral part of the business and its identity.

Generate Rental Income

Consider your real estate loan restrictions, type of business, and building to find possibilities of renting out parts of the building you may not be using at that moment. Rental income can greatly subsidize your monthly mortgage expense and help break even on the property in a short period.

Investment to Support Retirement

Another benefit of buying commercial space is the option of being able to sell the business but keep the real estate. Entrepreneurs planning to own business for more prolonged periods make this strategy work to their advantage after paying off their commercial mortgages. The property will continue to generate income from tenants during your retirement.

Leverage Tax Advantages

Buying commercial space puts the owner at a tax advantage when there is depreciation on the property. Depreciation lowers taxable income and mortgage interest deduction. Talk with a tax consultant to help you analyze the figures to see if they work in your favor than leasing.

Commercial space is a significant category when it comes to real estate investments. Consider the above advantages when buying commercial space and contact Emerald Valley Financial Services for further advice.