This week we will conclude our discussion of the lease vs. buy decision as we address commercial real estate as an investment opportunity. Should you determine that you have enough capital to buy, you’ll be faced with which building to buy based on two distinct criteria: fulfilling your needs and making an investment.
First, you will want a property that is best suited to your individual needs. Does it have enough space? Will there be room to expand? Is it in the right location for your business? We have addressed these questions and others in our previous discussions of this topic.
The second perspective from which you must make your decision is from that of a potential investor. Understandably, every person interested in starting a company is not expected to be an authority on long-term market trends, but nonetheless, you should be able to address a few things. What are the current trends in the area? That is, in 10 or 20 years, will your business still have a place in this area? Also, will your business cause this property to appreciate or depreciate in value? Will the daily demands of your business on the property in question cause so much wear and tear that you cannot sell it for as much as you bought it?
When starting, expanding, or relocating a company, it is important to recognize what your assets are. Keep in mind that if you decide to buy, the property that you purchase will become one of the most important assets that you have. Because of this, it is imperative that you consult an expert. You do not want to leave the future of your business to chance, so be sure to cover of your bases before making a decision on commercial real estate.