Lease or Buy? Your Business Property Decision In Adelaide Lease or Buy- Your Business Property Decision In A | Page 15

Pros of Leasing
 More liquidity: You tie up significantly less of your cash because you
don't need to make a down payment to move into the space. However,
you should expect to pay upfront fees for an attorney, broker, prelease
inspection and security deposit.
 Focus on your business: Managing a commercial property can be
complicated as there are insurance requirements, maintenance costs and
other issues that can distract you from your business. Leasing allows you
to focus solely on your company.
 Easier to budget for: When leasing, you generally won't have to pay for
any significant maintenance, repairs or upkeep to the property, which
can amount to huge unforeseen costs (though you may be expected to pay
for minor repairs). Instead, you'll know exactly what you need to pay
each month.
 Tax breaks: You may deduct these costs as incurred: lease payments,
property insurance, property taxes, utilities and maintenance. You can
deduct your entire lease payment, in contrast to a mortgage's interest-
only deduction.
 More flexibility: Qualifying for a lease is oftentimes easier than
qualifying for a commercial real estate loan, so you have more options
when it comes to picking a space. You can also move when the lease is up
without having to sell property. You might be able to afford to lease a
property that is too expensive to buy, which can help you get into a prime
or strategic location.
Cons of Leasing
 No equity or appreciation: You don't accumulate any equity when you
lease, although some contracts have a rent-to-buy feature that allows you
to apply a portion of the rent you've already paid toward the purchase of
the property. Without equity, you don't benefit from capital appreciation.