Leasing or buying industrial real estate: which is better?
Deciding whether to lease or buy industrial real estate could be tough. For one thing, there is no simple answer to the ‘which is better?’ question. The decision is ultimately influenced by numerous factors such as the nature of your business, the company’s vision, rate of growth, tax considerations, etc. Whether you decide to buy a lease, Vancouver Commercial Brokers has an excellent range of Vancouver industrial properties for sale or lease.
When should I lease industrial property?
If any of the following applies to your company, it is strongly recommended that you consider leasing industrial property:
Your company is new: New companies typically less capital than long-standing companies. And perhaps more importantly, there is a lower level of fiscal certainty. Growth projections for new companies are at best estimates, and the space needs could easily change with time. Leasing is, therefore, more advisable because it offers more flexibility than buying.
Your company is in a growth or decline phase: If your company is expanding or downsizing quickly and there’s no sign of stability in the horizons, leasing would be a safer option than buying. You can easily move to a bigger or smaller space if you have to.
Investing more capital in your company could translate to growth: If projections show that there’s still room for growth, you may be better off investing your money in your company, rather than real estate. Real estate locks capital, and you’ll only reap the returns later on.
Your business involves warehousing: Manufacturing companies that make use of warehouses are always in need of space. Leasing space seems to be a wise choice as they can always lease more when they need more.
When should I buy an industrial property?
Before you type ‘ Vancouver industrial property for sale’ into your Google search box, you should check to see if your company ticks any or all of these boxes
You’re in a position to start owning assets: At some point in a company’s journey, the owners start thinking about owning assets to strengthen the balance sheet. If your financial advisors agree your company is at this point, you should consider buying an industrial property.
You need to permanently customize your space: Buying your building affords the opportunity to build your industrial space in your image. You do not have to worry about getting the space back to its original state when your lease expires.
There’s little room for more growth: When your company’s growth projection shows little room for upward or downward movement, you may consider investing in industrial property with spare capital. You’ll be safe in the knowledge that there’s little chance you’ll need more or less space in the future.
You want to buy for the future: Some companies buy more property than their current needs in anticipation of future growth. In the meantime, they lease the excess space, and the proceeds could help offset carrying costs. If you’re doing this, you should ensure your lease terms are flexible so you would be able to use your property when you need it.
If you are still in doubt, you might consider doing a bit of both. Some companies buy long-term sites and lease other locations, affording the benefits of both (and the downsides). Alternatively, some companies lease industrial property and insert a purchase option into the lease terms. Doing so gives them a greater say in the building than opting for a plain lease. Whatever you do, you can trust the realtors at Vancouver Commercial brokers to offer. the best advice as well as the perfect Vancouver industrial property for sale or lease
Ashley Real Estate Inc