Melbourne, Fl., offers many opportunities for investors as it is a hub of business and infrastructure in the center of Brevard County. Before investing in property on the Space Coast, there are several factors you should consider. Investing in property involves more than determining the best office space, it requires a deeper evaluation of how buying or leasing commercial office space affects your business growth and annual costs.
Buying Commercial Office Space
Buying commercial office space is enticing because if it’s fully occupied, by yourself or other businesses, it means you’ll have a steady income. Buying property also allows you to diversify your investments and gain access to a monthly income or rent, something stocks and bonds can’t do. Monthly mortgage payments also help you build equity and you’ll be able to calculate fixed costs for your business. However, buying a property does increase your upfront costs, and owning increases your liability. It also lowers your flexibility for if your business grows larger than the office space can manage, forcing you to sell the property.
Pros and Cons of Leasing Office Space
On the flip side, leasing commercial property gives you that flexibility for growth, and it can free up your working capital and allow you to use your money in the market instead of focusing on real estate. Leasing also comes with tax benefits such as the opportunity to reduce your taxable include by writing off items such as lease payments, property insurance and taxes, and utilities and maintenance. Depending on the state property laws you may be able to deduct the entire amount of your lease payment giving you more tax savings, on average.
The downside is you won’t have control over the property and have to answer to a landlord who may include annual escalations, the annual amount the landlord can raise rent prices, in the lease agreement. This can lead to higher monthly payments and variable costs for your business. Leasing commercial property gives you freedom, but it also comes with many variables you need to consider when growing your business.
Do you have a commercial property you are considering leasing? Are you looking to expand your business space in Brevard County, FL? Contact Ullian Realty. Our team of brokers is ready to help you figure out whether it’s a better investment to buy or lease commercial property in Melbourne, FL.