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Choosing to purchase or lease commercial real estate

When a Florida business owner is deciding whether to purchase or lease a commercial real estate property, there are several factors they should consider before making the decision. In order to make the correct choice, the business owner should begin by analyzing their needs and goals.

The advantages of choosing a commercial lease are several. Leasing will require less up-front cash; the business will generally only need to make a security deposit and pay a month's worth of rent. The business will also enjoy the fact that the property owner will usually be responsible for the maintenance and upkeep of the property, and the venture may be able to report rent payments as a business expense on tax returns. A lease also makes sense if a business owner is not certain of whether the location will work over the long-term or if the business does not yet have enough credit to secure a mortgage.

By contrast, advantages of purchasing a commercial property include long-term savings over the life of ownership. Generally, a business will end up paying less for a mortgage over time than it would have paid for the same location through a lease. If the property is in an area where values are going up, the business can enjoy increased property values as well. Being able to claim depreciation on taxes can save money as well.

Commercial real estate transactions often involve complex negotiations, research and many other factors. Business owners may benefit by seeking the guidance of a real estate attorney before entering into such transactions. An attorney might help by researching locations and helping the owner determine whether purchasing or leasing is a better option for them. They may then help by reviewing sales contracts and leases to protect the business interests of their clients.

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