Commercial property - buying vs leasing

THE decision about whether to buy or lease a commercial property is often far more complex than buying a house.

Colliers International Toowoomba outline the pros and cons for both buying and leasing to help you make that choice.

Commercial sales and leasing executive Mike Turley says, “you can plan for a baby or to downsize your home in retirement, but trying to figure out exactly which property is best for your business can present plenty of challenges”.

When you buy a commercial property, it’s yours and you own it.

Mike said, “if you would like to change the internal layout of the building, sure no worries. If you have the space to extend the building, go right ahead”.

“The perks of owning your own commercial property, is that if things take an unfortunate turn, it’s an asset you can sell suddenly if you require money.”

When buying a commercial property, you hold all the cards when it comes to deciding how best to manage the site.

On the downfall residential property doesn’t come cheap and the picture isn’t any brighter when it comes to purchasing a commercial property for your business.

Mike further commented, “financing a commercial property isn’t like financing residential”.

“In most cases you may need to put up far more deposit – anywhere from 25 to 50 per cent, depending on how much money you have behind you.”

On the other hand, leasing a commercial property has advantages too, the most important of which is having the ability to change and adapt far more quickly than if you own the property.

“If you are an investor on the side, you’ve got that ability to be able to go and invest elsewhere,” he said.

“You haven’t got all your money tied up in the building.

“If you choose to lease a property for three years and your business grows exponentially, you aren’t stuck with a property if the market’s not right to sell.”

Mike said there was also cons associated with leasing a property.

“Your rent is almost guaranteed to increase in line with CPI each year.

“You are also paying off someone else’s mortgage.”

For further information or to discuss the opportunity to buy or lease in the Toowoomba region, please contact Mike Turley of Colliers International Toowoomba on 0477 012 444.