Should I Lease or Buy My New Business Facility?

As a business owner, first you decide your specific needs for a facility. It all just comes down to how you will obtain it. There are several things to consider when looking to move. While affordability is always something to consider, that’s not the only factor when comparing whether to lease or buy. Let’s lay out the differences to assist with deciding on what is best for you.

Advantages of Purchasing

Potential Appreciation

You will own this property. Depending on the market, you have the potential to eventually make a return. Consider inflation and the location. Let’s say the purchase is originally made in an area with low property values because of the effects of crime, population, or low proximity to high traffic streets. There’s not much risk involved unless your business goes under. If the city is revitalized, this assisting with high returns in the long run.


You own the facility. You have the rights to make changes, increase the value, and build a property that suites your tastes and needs. This creates a relationship between you and the property. This is also ties into appreciation as the higher quality of changes which you put into a property, the higher the possibility of a return.

Advantages of Leasing


It sounds weird, I know. But you are not accounting for all the costs included in owning a property. When leasing, you don’t have to pay for the cost of maintenance, repairs, bookkeeping, insurance, and so on. Consider the costs that would be incurred if the roof needs to be replaced. Luckily when leasing the owner of the property must take care of those costs.


If the location ends up not suiting your business, move. Leasing provides mobility. For situations like increased crime rates, decreased property values, natural disasters, and the whole nine yards, just pack up the employees and goods to start over in a better part of the city. Wherein with purchasing, you invest so much and if the realization comes that it’s not appropriate, you’re stuck. Maybe you want to test out a market. Alternatively, if the business fails it’s not another large cost which is left still having to be paid.


Whichever you choose, there’s no right or wrong. Your business may not be looking to stay around for the long run or you may not want to be responsible for the costs of maintenance. Maybe you like being able to have the freedom of having your own space or making a return on the investment. Weigh the costs and benefits before you jump into the deep waters because once you do, you might not have a life vest to help keep you from sinking.