Transitioning from renting a commercial space for your business to owning one can be a risky and even scary step. Right now, as we begin to roll out of the pandemic, there is the possibility of obtaining an office space for a very good price than just a short time ago. So if you have been saving up or have the funds to do so, now just might be a good time to purchase a commercial space all of your own.
One of the largest drawbacks to renting or leasing any property instead of owning it yourself is that the money goes mostly to the benefit of your landlord. Yes you get to have a space in which to conduct your business and make money from that, but the landlord is making money off of you. They receive all the benefit of paying the property bill on time while building up equity and making profit.
When you own the building you are building the equity and your net worth. You also stand to profit on the equity if you ever sell it. Commercial Properties tend to hold and increase their value at a higher rate than other investments. Commercial property can increase in value from its ability to generate income.
If you ever need to revamp the property you also have the ability to pull from the equity for money to help make improvements.
If you purchase a property with extra space you have the opportunity to become the landlord and begin making money from renters. Rental income is a good way to help keep a steady income during times when your business might wean. We all know that every business has high profit months and months when profits are not so huge.
Just make sure you are willing to take on the extra work of property management or the extra cost of hiring a property manager to do that work for you.
Owning commercial property comes with several tax benefits that could help put a large chunk of money back into your business to keep operating it.
Commercial property owners can take advantage of depreciation deductions and mortgage interest right offs. Sometimes these deductions can be enough to off-set the purchase price or ease the tax burden of general business taxes.
Renting from someone else puts you at the mercy of their preferences and tastes for what is done to their property. It is not uncommon to run into rules and regulations on how you decorate or where and what signage you can hang up. When you own the space you get to design the look and brand of your business space. You also don’t have to worry about rule changes (or rent changes).
Let us help you find the perfect Minot commercial real estate space for your business. Please contact us any time.