PROPERTY OWNERSHIP: A POWER MOVE FOR SMALL BUSINESSES

“It was nice to buy our own place and know we have a permanent spot.”

“Being able to preserve cash flow while gaining ownership of our building was
key.”

“[My payment] stays the same so it takes a lot of the worries away about
what tomorrow will look like.”

This is what some of our clients have said about owning the home for their small business instead of leasing. It’s incredibly rewarding to help people purchase commercial property, but we appreciate that it’s a huge decision that requires a lot of thought and planning. With over 40 years of experience, we’d like to share some top considerations and advantages that may help you make the right choice for your company.

If you are thinking about buying commercial property you’ve probably spent a lot of time imagining yourself in your space – and that’s a great starting point! Just as homes offer features that can enhance your personal life, picking the right commercial property can make running your business much easier when you focus on some key factors.

How much space do you need?

Do your employees need on-site office space where they can work? Do you plan to rent out a portion of your building to offset your occupancy costs? Will you need warehouse space to store inventory or a showroom to display products? Think about how a property will serve every aspect of your business. And remember to factor in long-term growth goals for your company so you can accommodate future expansion and avoid (or at least prolong) the need to relocate.

How will you use your space? 

Will you need to provide parking for customers and/or employees? Do you need secure yard space for heavy equipment or materials storage? Are streets and surrounding areas able to easily handle deliveries to your business? Pay close attention to the zoning requirements for any property you are considering to ensure they align with your company’s operations.

Location, location, location.

This real estate adage is still used because it’s still completely relevant. If you own a business that relies on drive-by and foot traffic, target your search to spaces that offer high visibility. Being close to freeways, railways, or ports will likely be important if you ship or receive high volumes of freight. Will surrounding businesses enhance or compete with yours? An experienced commercial real estate agent will be invaluable in helping you identify properties that meet your specific needs.

In addition to the above considerations, it’s obviously important to address the elephant in the room: How much will buying space cost? We talk with many small business owners who are under the impression that they simply can’t afford to purchase commercial real estate. There’s no question that it is a significant investment but there are some important benefits that can make ownership more attractive – and more financially sound – than leasing.

Enjoy tax savings.

As with residential ownership, owning commercial property comes with tax advantages including the ability to take deductions on your mortgage interest and property tax expenses. Be sure to talk with your financial advisor or tax specialist to ensure you leverage all available opportunities.

Control your destiny.

We have worked with countless clients whose landlords continued to increase rates, neglected to invest in much-needed property upgrades, or even sold the property out from under their tenants. Owning your space takes these worries out of the equation and puts the control where it belongs; in your hands. 

Invest in your future.

One of the most important reasons to consider building ownership is that it allows you to build equity in your company. Instead of money going out the door every month for occupancy costs, you are investing in your company’s future! Call us biased, but we believe that’s the best investment you can make.

When we share these advantages with small business owners, they are surprised to find that owning can be comparable to or more affordable than leasing, especially with the right financing. The SBA 504 program is designed specifically for small businesses and delivers solid funding with low down payments, long terms, and fixed, below market rates. And that can put the goal of building ownership, and all its benefits, well within reach. 

To learn more about the SBA 504 program, please contact our team. You can also learn more about buying versus renting with our BVR Index.

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