Buy vs Lease Comparison

Every Small Business, at some point, is faced with the dilemma of whether to lease or buy their location. "Should I lease or Buy?", "What are the advantages and disadvantages of each?" 

Most business owners facing this dilemma for the first time find this endeavor as intimidating and overwhelming as it is for a first-time home buyer. We, at SoCal CDC, expect that the discussion below will provide you with some useful points and make your decision easier.​

If you have any questions, please contact our professional staff.

BUY VS LEASE COMPARISON
BUY
LEASE
PROS
CONS
PROS
CONS
Debt Reduction and Equity Build-up
Initial capital outlay
Mobility
 Loss of appreciation 
Interest on the mortgage loan is tax deductible
Property values may decline
Tax deduction as business expense
Contractual penalties
You can take annual depreciation deductions on taxes
Holding period of more than 5 years
No loss of owning in a bad market
Loss of Improvement value
No rent increases
Financing
 Freedom to sublet if necessary to move
Lack of Control
Control


No equity build up 
Income


Abandon location at lease termination