Dinn, Hochman & Potter, LLC
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Should the business buy or lease a real estate location?

Location is key to many Ohio businesses. The location often sets the stage for the clientele the business will attract. A business located in an industrial setting does not lend itself to everyday consumer traffic; however, the same business in a more retail setting might. The actual real estate occupied by the company plays an important part in the business's growth and development.

Many business owners face the decision as to whether it would be better to buy or lease. If they decide to buy, they have the benefit of building equity and establishing a stable location for their business. Over time, the business location can be paid for and this can be one less expense that the business must meet. However, on the down side, the entity is often also tied to the property. If a more desirable location is discovered, moving may not be an option.

Some companies discover that leasing is more advantageous for their businesses. Leasing offers the business the flexibility to move as the market demands. Additionally, in many cases, landlords are willing to contribute in the form of tenant improvements. However, rather than building equity, the lease payment is strictly another monthly payment. This payment does not go away over time, and it may increase as the market demands.

The decision to buy or lease is an important one for the Ohio business to make. Real estate values can change based upon the market and the surrounding area. Once the decision is made, it will be necessary to sign either a lease or purchase agreement. As with all contracts, one will want to have experienced legal counsel review the document prior to signing.

Source: nevadabusiness.com, "Weighing The Options: Owning Versus Leasing Commercial Real Estate", Pat Evans, Jan. 1, 2018

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