What are the pros and cons of retail space for lease? Would you be better off purchasing some retail property? Who should you talk to for advice?
We are RDS Real Estate, leading the way in Fort Worth Metro with outstanding industrial space and commercial property for rent. When it comes to retail space for lease, the pros and the cons, we’ve danced this dance a few thousand times, so pay attention to the advice in this article, and call us at 817-439-3224 for more information.
The pros of leasing retail space for lease.
The most important pro when discussing retail space for lease is the cost: leasing is much less expensive than purchasing. The monthly rental price might be comparable to a mortgage payment should you purchase, but the “buy in,” or down payment, when purchasing, generally means most small-to-medium sized businesses cannot afford the purchase.
Secondly, you will not be crippled by large maintenance costs of repair costs should the building be damaged and, if it is damaged, and you are unable to conduct business for a period of time, a good insurance policy will cover your lost sales during that time.
Third, leases are relatively short term, usually year to year, whereas a mortgage contract is a thirty-year commitment in most cases. If that location is not working for you, ride out your lease until year’s end and then move to another location.
The cons of leasing.
When you lease, you are giving up a certain number of tax benefits/deductions. You are at the whim of the property owner regarding rent increases in the future. And while on that subject, if you develop a bad relationship with the property owner, the length of your lease could seem like an eternity. Finally, you are building no equity at all while leasing.
Is buying better?
Make no mistake about it, purchasing retail property or industrial space is expensive, not only the original down payment but also the maintenance and repair costs. On the flip side, you are building equity, you increase the value of the property with each repair/upgrade, and the mortgage payment is fixed and predictable, provided you have a fixed lending rate.
And then there are the tax benefits, which are considerable.
Listen, we really don’t have a horse in this race. We own over three million square feet of commercial and industrial property in the Greater Fort Worth area, but we have, at one time, rented properties, so we know the benefits and pitfalls of both ownership and leasing. We are simply sharing the information we know to be true so that you can make an informed decision moving forward. If money is an issue, and it usually is for small businesses, then retail lease space is the only logical choice. If money is no issue, we believe the benefits of ownership far outweigh the negatives.
Odds and ends, and a word about RDS Real Estate.
RDS Real Estate is locally owned and operated, a name you can trust in Tarrant, Parker, and Johnson Counties. Call us today, no matter what you need i.e. warehouse for rent, shop for rent, retail space for lease, garage for rent. We have what you need at a price you can afford.
Insider tip of the day: check out the Fort Worth Design District, the perfect location, the perfect properties, for small businesses.