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Lease or buy? That is the question.
If you are in the property market, it only comes down to two things, “Get busy leasing, or get busy buying”. Are you not sure as to whether to lease or buy? Depending on who you are and what your plans of the future are the benefits between lease and purchase are quite different.
When it comes to buying or leasing, it’s important to look at the benefiting factors for each one.
Factors favoring leasing:
- Cash flow – A business can conserve its cash flow by leasing. Under a lease, the initial cash expense for the facility will be a month’s rent and a security deposit.
- Credit rating – The company has not established a credit rating sufficient to support a mortgage.
- Maintenance – The landlord is responsible for maintaining the property
- Property – You have been unable to find a suitable property that is for sale.
- Real Estate Values – The facility you’ve found meets the needs of the business but is located in an area where property values are declining
- Mobility – You’re not sure that the facility will meet the future needs of the business.
- Tax Savings – Rent is deductible as a business expense.
Factors favoring buying:
- Long-term savings – Purchasing a facility is usually cheaper than leasing. In a lease, the landlord attempts to build profit from the rent. Payment of this profit premium can be avoided by buying the facility.
- Location – If you’ve found the perfect location for you business and established the business there, purchasing the property will ensure that the business will not have to move.
- Control – Wanting to make substantial renovations to the property? By purchasing the property, you have control over these matters.
- Property – You’ve been unable to find a suitable property to lease.
- Real estate values – Finding a facility that meets your needs and is located in area of appreciating land values
- Tax savings – Depreciating the property over time may bring you tax savings. In addition, if the property over time may bring you tax savings. In addition, if the property is financed, interest based deductions are available
Lease to own is a viable option
Here are some of the benefits and procedure that go into lease to purchase:
- Buyer pays the seller option money for the right to later purchase property.
- Buyer and seller agree on a purchase price. (often higher than market value)
- Buyer agrees to lease the property from the seller for a predetermined rental amount.
- The term of the lease with option to purchase is negotiable, at which time the buyer applies for bank financing and pays the seller in full.
- A portion of the monthly lease payment typically applies toward the purchase prices.
- Buyers are often responsible for maintain the property and paying all expenses associated with its upkeep, including taxes and insurance.
- Buyer is obligated to buy the property.
What is finance leasing?
As you have discovered, when it comes to leasing, there is a wide array of options.
Finance leasing is an agreement where the leaser receives lease payments to cover its ownership costs. The lessee is responsible for maintenance, insurance, and taxes. Some financial leases are conditional sales or hire purchase agreements.
RDS Real Estate, your number one place for a cheap lease, will help you easily get into an industrial, commercial, and warehouse space.
RDS has options to buy or lease
RDS Real Estate has properties for buy or lease to accommodate to your desires. The properties within our business parks are for lease only but there is some lucrative land for sale within the area.
It is important to know the difference between lease or buy so look over the benefiting factors and see what is right for you.
Evaluate a lease purchase, lease to own, and finance leasing and find out what is best.