Buy vs. Lease

    Tax Savings

    Write off all of your mortgage interest.

    Depreciate the building and equipment.

    Property income is ordinary vs. earned income.

    Increase Personal Income

    Reduce your earned income by the amount of your building income.  This will lower your personal income tax burden.

    Hire family members to (legitimately) manage the property.

    Build Equity (and Wealth)

    Increase your equity ownership as a result of principal reduction (paid for by your company’s rental payments).

    Depending on your space needs you may be able to lease part of your building to other tenants who will help pay for your building.

    Appreciation

    Potential increase in the value of the property over time due to inflation or property improvements.

    Changes in supply and demand in the real estate market may increase the value of the property.

    Control Lease Expense

    With a long-term mortgage and control over building expenses, as the owner you can better control your business’s lease expense vs. traditional leasing.

    Add Value For Future Sale

    When you sell the property, you owe less on the loan, so you receive more cash at closing.

    If you sell your business in the future, you have an additional asset to increase the overall value of the business.

    Historically Low Interest Rates

    Mortgage interest rates are still historically low and consequently the decision to purchase a building should be now.

    Build equity more quickly than in the past.

    Bill Bell, Texas Real Estate Broker | License # 289494 RepublicRealtyAdvisors.com | 214.444.8781