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The pros and cons of buying or leasing commercial property

Since the onset of the COVID 19 pandemic many people are now working from home, even those who are employed by large companies invested in some pretty serious commercial property. So the big question for investors is ”where will commercial property sales be going?” – and the dilemma for those who still need office space is ‘’should I rather just be renting commercial property right now?’’

We can’t claim to have a crystal ball but as Conveyancing Attorneys who commonly handle these transactions, we can offer a little advice on a few of the pros and cons of buying or leasing a commercial property…

Purchasing

Don’t think that due to the pandemic this is a bad time to purchase a commercial property. Yes, there may be many owners selling who can no longer fill their office space, but the word is that with the return to level 1 many people are now being expected to return to their offices and most companies still believe this is the better way to work.

Following what could have been a dry spell for commercial property owners who may be selling at way lower than the going rates, perhaps investors should get in now. So, what are a couple of advantages of buying commercial property?

  • One of the great advantages of purchasing commercial property is financial appreciation. Commercial properties tend to grow in value with time in most markets. This means you can later sell the property and use the profit to fund other enterprises. Get sound advice on this though – and on the legal documentation and processes to be implemented when, or after, the purchase is made.
  • Another advantage of purchasing a commercial property is that your ownership stake in it will likely appreciate as you pay the loan capital and interest. Even without selling, therefore, you can use this equity or collateral for future financing needs.

Leasing

Similarly, a couple of advantages of leasing commercial property are…

  • When leasing commercial property, as opposed to buying it is there’s no down-payment and lower upkeep costs. Not needing a large upfront investment keeps your funds more liquid for use in other areas.
  • The moving in and monthly costs of renting are generally lower and a higher portion of a rental is tax-deductible than that which is allowed for mortgage payments.

A serious business

The buying, selling or leasing of property is a serious business, as property is often amongst your largest assets. The legalities of property transfers therefore should be handled by Attorneys and Conveyancers, well versed in this area of specialisation.

We have just touched the tip of the iceberg here, so don’t hesitate to contact your commercial or residential property purchase or leasing legal experts Glenn Rooseboom Inc. for more advice. We’ll be happy to help.

Watch this space for similar advice on buying or renting residential property in my next article, but whether it’s commercial or residential property this is a good time to initiate the transfer of property as over the December holidays things slow down at the Deeds office.

Stay safe – and stay legally protected!

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