Ottawa Commercial Property: Lease or Buy?
To lease or buy your Ottawa commercial property… that’s a question many Ottawa area businesses face, one that you will need to address before you start searching for office space. If you do decide to build or renovate space that you buy or lease, Argue provides Ottawa commercial general contracting to make your space uniquely your own, but first…
The Economics of Lease Versus Buy
Why lease Ottawa commercial space? The main benefit is that your business’ initial outlay of cash to get office space will be less. Many choose to buy Ottawa commercial space because it costs less in the long term, plus you get the benefit of any appreciation in the value of the property.
Cash-flow analysis. Ascertain how much cash is needed to cover the after-tax costs of each Ottawa business facility acquisition alternative. facts you need to run this analysis include:
- Purchase terms (including closing costs) versus leasing terms for the Ottawa commercial space
- Tax rates
- Depreciation numbers, based on the Ottawa commercial facility’s expected lifespan for your business
- Cost of capital and any other costs that you would incur if you leased the facility but not if you purchased it, or vice versa
Long-range impact: Many Ottawa business owners in the market for commercial space tend to have a short-term view, looking at the first year cash impacts for example. It’s important and worthwhile to consider how a lease or rental could impact your business in the future.
Leave a Reply