Pros and Cons of Property Leasing


If you are a business owner who is beginning to look at moving into a brick-and-mortar location, you will need to decide whether you want to lease or buy property. Property leasing has several pros and cons that you should consider before deciding which option is right for you.

Pro: Less Money Upfront

One good part about leasing a property is that you will often pay less money upfront than you would if you were buying a property. This can be a great choice if you are still a small business and you are trying to save money or if you own a larger business and are focused on your bottom line.

Con: Not a Long-Term Investment

Though renting is generally cheaper in the short run, your rent payments will not go toward the cost of the property like mortgage payments would. When you buy a property, all of the money you pay for mortgage gets you closer to owning your own location, which can be a big benefit for many.

Pro: Fewer Maintenance Worries

When you rent a commercial property, you may have fewer worries about the upkeep of your space. Generally, it is the responsibility of your landlord to handle maintenance issues, which leaves you free to focus on running your business.

Con: Less Control

With the reduced stress of renting comes reduced control as well. When you buy a property instead of renting, you have complete control over the building and you do not have to deal with a landlord or property manager.

Pro: Better Locations

A common reason that many businesses opt for property leasing is that the best locations are often offered for rent only. If you want to own a property, you may have to settle for a location that is not as optimal from a money-making standpoint. When you rent you have a better chance of getting a location that will bring in more business.

Con: Contractual Obligations

When you rent as opposed to buying, you give up more control in the form of contractual obligations. Contracts drawn up for rental agreements hold you accountable for rent even if circumstances change and the location is no longer good for your business. You may run into legal trouble if you attempt to break a contract.

There is no single right answer when it comes to the decision of whether to rent or buy a commercial property. If you are considering property rental, it is good to be aware of the downsides to property leasing so you can make an informed decision.


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