To Lease or Buy For My Business
As a business owner in Dallas Fort Worth, Texas, one of the biggest decisions you may face is whether to lease or buy your commercial property. There are pros and cons to both renting and buying, so it's important to consider what's best for your business. In this post, we'll explore some of the key factors to think about when making your decision.
Whether you’re a startup or an established business, your business needs its own space and at some point you’ll need to decide whether to lease or buy your commercial property. While there are benefits and drawbacks to both choices, the best option depends on a variety of factors specific to your situation. Here are four key considerations to keep in mind as you weigh your options:
1. The amount of space you need - As your business grows, will you need more space than what’s available in your current location? If so, leasing may give you greater flexibility since it’s typically easier (and less expensive) to break a lease than it is to sell a property. On the other hand, if you own your space outright, expanding into adjacent units or building an addition onto the existing structure could be more cost-effective in the long run than moving altogether.
2. Your finances and the business's finances - Both landlords and lenders will consider the underlying economics of the business owner and the business. As a startup entrepreneur or owner of an early-stage business, your personal credit score and finances (meaning debt and liquidity) will be considered primary risk factors for both the landlord's decision to lease and the bank's decision to lend. Knowing this and keeping your personal credit in pristine condition, that is with a score of 720 and above will best position you to take advantage of either option. Additionally, this is another area where cash is king. In commercial real estate and/or business lending, depending on your loan product (for real estate only or commercial lines of credit for startup working capital, leasehold improvements, and equipment) the lender may require you to put anywhere from 10% - 30% down of the real estate purchase price or total loan amount and will require excess cash reserves as well. Landlords look at your liquidity as they assess risk. Both banks and landlords may require a personal guarantee from the business owner, subjecting your personal assets to risk in the case of default of the lease or the loan.
3. The business’s cash flow - Landlords may lease and lenders may lend but if you or your business and the actual operating landscape (proforma's are nice but the realities and seasonality of business aren't always as kind) are not well-equipped to handle a potential large fixed expense in the monthly payment, consider right-sizing your expectations to your own personal appetite for risk. Make sure that whatever you sign up for is manageable for you first and feels comfortable for you. We'll call it your maximum allowable space budget. It should still feel warm and fuzzy and achievable even in a slower month.
4. Your long-term vision - The reality is that owning real estate creates other opportunities through asset leverage and balance sheet bolstering. If you fancy yourself an owner of all things you and yours, but aren't in a position today to buy, keep that goal in mind as your business (and you as a business owner mature). Continue to save and keep the operations of the business at peak performance. Once your lease tenure draws near a close (within the last 18 months of the lease) come back again and evaluate your ability and the decision to purchase. Work with an awesome commercial real estate professional to guide you through the process to make sure you are making the best decision for you and your business.
Irrespective of whether you have started up recently or have been maintaining a well-oiled machine for quite some time now; at some intersection during its tenure – every business has had its stakeholders sit down and deliberate over – should they be buying or leasing their commercial workplace? It is quite understandable in this global economic market that calls for constant growth and evolution that the majority of businesses usually don't stay put in any one spot longer 5 years. So with that being said – let us take evaluate both scenarios – shall we?
The Pros and Cons of leasing vs buying for businesses - what to consider
As a business owner or entrepreneur, real estate decisions are critical. When debating between the pros and cons of leasing versus buying for your business's needs, you'll need to consider both term and size. A term length lease can be a great option if growths needs change over time, while purchasing could provide more stability over the long term. As you weigh up the options, you'll want to ensure that you're leaving enough room to grow as a business without signing up for too much space or committing to a term that might not meet your changing needs. Do your research and think carefully - there's long-term implications at stake with either option!
The different types of commercial real estate available for businesses
When it comes to deciding where to base your business, it's important to be aware of the various types of commercial real estate available. From a small storefront in a shopping district, to a multi-story corporate office, the range of options offers something for all levels of business owners and entrepreneurs. While considering different locations, renters should consider factors such as monthly lease costs, upfront fees and renovations. Purchasing property instead? Then there are considerations of potential loans and hidden expenses that could come with the property itself. For businesses looking to grow or expand their operations, commercial real estate offers a wealth of opportunity for success.
How to grow my business with the right commercial real estate property
Growing your Dallas Fort Worth business with the right commercial real estate property is a key factor in determining success. Fortunately, you have an experienced partner to help you navigate your options – Modernest Realty commercial brokers and real estate advisors are experienced in connecting small businesses to optimal real estate options that help maximize their potential. Consider whether you want to lease or buy the property; our team can go over all of the costs associated with leasing and buying so you get a better understanding of what will work best for your business. Make sure you equip yourself with the help of experts that understand Dallas Fort Worth commercial real estate – Modernest Realty is here to facilitate your next steps as you continue growing your business.
Tips for finding the perfect business property for my needs
When it comes to finding the perfect business property for you, consider both visibility and its relationship to your customers. Ensure that the location of your business is going to allow your customers easy access while also providing them with a clear view of your operation. You should also consider if there are other stakeholders to take into account when looking at properties such as suppliers, partners or employees. As a business owner or entrepreneur, think through whether leasing or buying is best for you. Ultimately, find a commercial real estate opportunity that helps you grow your current or future business without breaking the bank.
Finding the right business property for your ever-growing business is an important part of success. When considering leasing or buying a commercial real estate property in Dallas Fort Worth, there are many things to consider in order to make the best decision for you, your business, and your future. From understanding available options on the market to making sure it’s the right fit for you and your finances and goals, selecting the best business property will set you up for long-term success. Learning more about what options are out there and how Modernest Realty can help guide you through this process will go a long way! With our expertise in not just commercial real estate but growing businesses nationwide, we use insight and experience to provide valuable advice tailored specifically for you. Learn more about what Modernest Realty can do for you and your business and how we can find the business property that’s right for you by giving us a call at (214) 310-1495 or by scheduling a consultation. With us by your side, you’re well on your way toward securing a strong foundation for growth in your business journey.
