As a business owner, owning your own building can provide significant upside. Not only can it lower your monthly costs and be tax-efficient, but it can also eventually serve as a source of low-cost funding for future growth. It can also increase the value of your business and diversify your risk profile.
But the benefits of owning your building don’t stop there. When you own your own space, you have the ability to customize it to meet the specific needs of your business. This can enhance efficiency and allow you to grow and evolve without being limited by the restrictions of a leased space.
On the other hand, leasing a property means that you must continually account for an increased monthly cash outflow. Rents can increase over time, and getting additional concessions to upgrade or update the space may become more difficult.
Deciding to buy a building means allocating upfront cash to real estate, but it can also put you in a position to lower and lock in your monthly costs. This can create a more solid balance sheet, which can in turn help you tap into other sources of funding. And as you build equity in the property, it can become a source of low-cost financing as well.
Not only will owning your building allow you to build equity and diversify your risk profile, but it also offers favorable tax benefits that aren’t available when renting or leasing. These include the ability to write off the interest paid on loan payments, take advantage of depreciation deductions, and claim maintenance work on the building as deductions.
Purchasing a building may seem like a daunting task, but it can be more affordable than you think. Depending on your business, you may be eligible for low-cost funding sources such as Small Business Administration loans or state and local development programs.
In summary, owning your building as a business owner can provide long-term dividends, lower monthly costs, be tax-efficient, and eventually serve as a source of low-cost funding for future growth. It can also increase the value of your business, diversify your risk profile, and allow you to customize a space that meets the specific needs of your business.