When trying to decide whether to buy or lease Commercial Real Estate in Brunswick County a market and financial analysis should be completed. There are other non financial considerations, some of which will be briefly discussed here.
You need to analyze the local market that you plan to build or lease. Discover the current and future, for the years you plan to occupy, rental rates and property appreciation/depreciation. These numbers will help you to decide which is better for you. For example, if property values rise faster than rental rates then buying may be a more attractive option due to the building of property equity and resale value. Obviously, current interest rates will be necessary for the analysis.
The financial analysis will help decide whether buying or leasing NC commercial property will produce the least overall cost. Lease payments, depreciation, operating expenses, interest, mortgage payments, and property tax are all tax deductible. Therefore, the present value of the sum of the mortgage payments, closing costs, and other ownership related costs minus tax deductions and benefits of ownership (i.e. resale value) versus the present value of the sum of the lease payments and related cost minus the tax deductibles will produce the net cost for each alternative. Whichever has the least net cost will be the most financially attractive alternative.
Some other things to consider:
- If the building is purchased then it is harder to downside or expand quickly if more or less space is needed. Having to deal with these types of situations could divert needed resources to real estate asset needs versus business processes.
- In addition to mortgage payments, ownership incurs other expenses such as insurance, repairs, all utilities, and property taxes.
Speak to one of our Brunswick County realtors about commercial real estate property for sale.
