Buying A Business Location Vs Leasing - Why Buying Suits Almost Everyone

One of the biggest advantages of having a commercial property is that it still performs for you even when the market is sluggish. And whenever the economy becomes robust, you can expect the commercial property to provide you a steady flow of income. However, the major challenge for any investor is to decide whether to lease the commercial property or to buy it. Many of the leading commercial mortgage lenders in the U.S. will suggest you to go with buying the piece of commercial realty, and there are reasons for offering such a counsel. Only a few reasons-your liabilities lessen whenever you own an asset in the name of another entity (that is, your company); creating a company and leasing it to yourself-are enough to let you know the benefits of being your own landlord. In this post, we are uncovering many of the similar reasons. You will have the access to building equity of your business This phenomenon is also referred to as "property value appreciation." Here, your commercial realty's equity will remain intact and will even increase in the coming time. For example, if you have purchased a business condo for yourself, you will be easily selling that piece of property at a rate that is three times than what you must have paid originally. Also, the appreciated value of commercial real estate depends on the business's location. Another significant aspect of investing in the commercial real estate is its ability to put debt on that very asset; this debt must be several times higher than the original equity. Now, this, further, allows you to invest in more assets having less money-and this, finally, helps in magnifying the equity till the time the loans are repaid. Sub-leasing a portion of your commercial space and making an additional income Whenever you will rent a property within your own commercial space, you can earn additional incomes (which can be made as a source of pension in the later time). Which is why, it is often said that being a landlord is similar to managing your business; and this can be rewarding-plus, you can be your own boss. Each month, your tenant will offer you a decent wad of cash or a check-and that stream of cash will be enough to cover a property's mortgage. Further, this will allow you to withhold a property until it gains value. Paying mortgage versus hauling a lease It is always better to pay off all the mortgages than to be tethered to a lease. Because when you will repay a mortgage, you will make a one-time payment. However, when it comes to making lease payments-it will go on forever. You can always see a monthly mortgage payment as a monthly rent payment-the only difference being that in mortgages, one day the amount will be fully repaid. Energy-efficient tax credits All the rental income that you will receive as a landlord will be taxable-also, a buy-to-let mortgage will have a rate that is higher than that of the others. However, there are a couple of tax deductions that are available to landlords. These, generally, include the expenses incurred while: Replacing damaged furniture Repainting Accounting processes Replacing disposal ducts and water pipes Buildings insurances Cleaning and gardening Professional services Depreciation that comes as wear and tear (usually close to 10 percent of the total gross rental income) So that is it for now, readers. All these factors easily explain that why the decision of buying a commercial space is more lucrative than that of leasing one. For more information regarding commercial mortgage lenders and commercial real estate financing visit our website parkwestcapital.com Article Source: http://EzineArticles.com/9461098