68 – Lease or Purchase – Which is Best for Your Circumstances?

Good morning and welcome to Episode 68 of The LeaseSmart Commercial Real Estate Podcast, brought to you by LeaseSmart.com.

This week Craig welcomes back a special guest on the show Mike Sowinski who is a CPA with CFO Consultants. He’s joining us today to shine a little light on the question of whether to lease your building or buy.

Craig and Mike kick off their discussion today comparing the risk-to-reward ratios of investing in your own business and investing in property for your business.

In choosing between leasing and buying your building there can be a third option- a hybrid deal – where written into the lease, would be a sign-able purchase option. That’s the understanding that you are leasing the space but that down the road you want the right to buy it at a set price. That option is great for you if the market goes up you can buy your building are that pre-market-rise set price. And, if the market goes down, you can feel good about not owning property that has just gone down in value.

Here’s a question that many people ask: How can you buy a building when you don’t have enough for a down payment? Craig and Michael have both done this so it’s not rare.

Here’s the solution: You write into the contract that you’ll lease the building and that a certain percent of your rent will apply to a down payment. It will grow and you’ll have that equity built in. Then, in a few years you can buy the building, of course it may be best to have a set price on the building. In that case, you may end up getting to buy it below market value. Even if it is just at market value though, the great advantage here is that banks are out of the picture.

As always, your host is Craig Melby, the founder of LeaseSmart, whose objective is to find companies the best facilities and get them the best terms, making their business more profitable and less vulnerable to future, unpredictable circumstances. If you’re finding yourself in this situation give Craig a call.

Craig can be reached at 800-962-2419 and craigmelby@leasesmart.com.

Have a fantastic day!

Helpful Links:

Connect online with Michael Sowinski of CFO Consultants or give him a call at 828-712-2913.

For more information, be sure to visit LeaseSmart.com

Questions about YOUR lease? Feel free to contact us for a complementary consultation to decide how we can help your company grow and prosper.

Craig Melby, CCIM, Founder
(800) 640-9141 CraigMelby@LeaseSmart.com
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